The Engineering Export Promotion Council (EEPC) of India, on November 23, 2020, revealed during ‘FarmMech 2020’, a virtual meeting on farm digitisation and mechanisation, that India has become a net exporter of agricultural machinery (agri-machinery) for various major countries, including the United States (US), the United Kingdom (UK), Italy, and Germany. It also said that India was also a major exporter of solar irrigation pumps. According to the EEPC, tractors have been the largest agri-machinery to be exported to other countries, accounting for 66% of the total exports. Around 50 Indian manufacturers for agri-machinery participated in this exposition.
Trading Partners
The US is the biggest buyer for agri-machinery from India among the Northern American countries. Among the European Union (EU) members, India’s highest percentage of exports for agri-machinery in 2019 were to Germany. The next highest buyer from India was the UK.
India also has been in a trade agreement with the Association of South East Asian Nations (ASEAN) for a long duration. Further, India had strengthened its relations with ASEAN region through the ASEAN-India Free Trade Agreement (AIFTA) which was signed on January 1, 2020. In addition to this, India has been the largest and one of the most industrialised trade partners for the South Asian Association of Regional Cooperation (SAARC).
The African Continental Free Trade Area Agreement (AfCFTA), which was officially established among 54 countries of the African Union on May 30, 2019, with the objective to become the world’s largest free trade zone after the World Trade Organisation (WTO), would further provide opportunities for India to expand its export of agri-machinery with many other countries.
India’s export of agri-machinery has been estimated at around US $1024.58 million during 2019-20, by gaining a positive trade balance of about US $708.3 million during this period. In addition to this, India’s agri-machinery exports had been accounted for approximately 1.3 per cent of the total engineering exports during this period. Further, India had acquired about US $782.92 million while exporting agri-machinery to various countries, including North America, Eastern Europe, the EU, the UK, Africa, ASEAN and SAARC during 2019-20. These exports had accounted for about 76.41 per cent of the total exports.
According to EEPC, global agriculture equipment market would be reaching up to US $279.5 billion by 2025 with an estimated Compound Annual Growth Rate (CAGR) of 6.5 per cent from 2018 to 2025. The market was initially valued at US $171 billion. India, being a country where the economy is majorly dependent on agriculture, has a huge potential in mechanisation of agricultural machinery.