February 17, 2023
With a population of 140 Crores, India is the second most populous nation in the world. As per estimates, India’s population is expected to reach 150 Crores by 2030.
Another important statistic to be reviewed is export revenue of India’s agricultural products. India’s agricultural exports were at Rs. 20,00,000 Crore in 2020. It is expected to reach Rs. 30,00,000 Crore in year 2030.
Both above numbers point to an important conclusion: India’s agricultural growth is unavoidable and is going to be substantial in coming years.
To support requirements of growing population within India and across the globe, it is important for Indian agricultural sector to gear up for this challenge and make advancements in ways in which farming is being done. This includes modernization of ways of cultivation and using emerging technologies to achieve better results as compared to traditional ways of agriculture.
Indian’s have traditionally been using manual labour or cattle to cultivate their farmlands. This was a very time-consuming process. With advent of vehicles, progressive farmers brought in the change and started using Tractors for cultivation and it provided great results. While over 9 lac tractors were sold in India during the year 2021-22, overall, the percentage of farmers using tractors is only about 12 to 15%. As compared to overall agricultural market, the number is substantially low.
This has been realized by government and to promote adoption of contemporary tools and modern methods to achieve farm mechanization, many state governments and the central government have offered subsidies in the range of 25% to 50% on purchase of tractors. The India Agricultural Tractor Market is expected to experience a compound annual growth rate of 8.9% from 2023 to 2027.
On an average, only about 15-18% farmers in India are wealthy enough to afford purchasing of modern farm equipment. Remaining 80%+ farmers are dependent on financial assistance by banks to purchase tractors.
Considering the potential of growth of demand for farm equipment and especially tractors, the vehicle manufacturing companies, and vehicle finance companies need to gear up for this herculean challenge.
Vehicle finance companies may be able to make provisions for funds as needed, however it is important for them to be administratively ready to handle the inflow of applications and processing of those on an expedited manner as competition in this market is going to grow quite fast. Those who can take advantage of strategies such as quicker staff augmentation, outsourcing, partnerships may be able to take advantage of this tsunami requirement of agriculture sector.
We at Suma Soft have domain expertise to provide end to end services to Tractor Finance industry. Our portfolio of services includes Lead Conversion, Verifications, CPA processing, Underwriting, Disbursement Processing, Post Disbursement Documentation and Customer Servicing.
Suma Soft aspires to be a strong partner with Tractor finance companies as the industry goes through this demanding period.
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