Future of Tractors in India: CNH MD Narinder Mittal on Market Trends & Growth Prospects

Exclusive interview with Mr. Narinder Mittal, President and Managing Director, CNH India

13 February 2025, New Delhi: The Indian tractor industry is at a crossroads, facing both challenges and opportunities as market dynamics shift. Recent fluctuations in sales have raised questions about the sector’s future, with factors such as changing farmer preferences, evolving mechanization trends, and external economic conditions shaping the landscape.

To gain deeper insights into the current state of the industry, Krishak Jagat spoke with Mr. Narinder Mittal, President and Managing Director of CNH India. In this exclusive interview, Mr. Mittal shares his perspective on market trends, CNH’s strategic approach to growth, and the company’s role in driving agricultural mechanization in India.

Q. The Indian tractor market has seen a slowdown in purchases recently, raising concerns about market saturation. How does CNH perceive the current state of the tractor industry in India? Do you believe there is room for growth, or are we approaching a plateau in sales volume?

The Indian tractor market experienced a slowdown, especially in the first half of 2024, due to the uneven monsoon distribution in 2023. However, the industry saw a strong recovery in the second half, with October 2024 showing a 22% growth in sales.

At CNH, we see significant potential for growth ahead. Opportunities lie in untapped regions, the rising demand for agricultural mechanization, and the increasing adoption of higher HP tractors. Our focus remains on expanding our footprints in underpenetrated areas like Uttar Pradesh, Rajasthan, and Gujarat while leveraging our diverse product range to meet evolving farmer needs. Notably, CNH recorded wholesale figures of 5,744 units in October 2024, highlighting the strong market rebound, while the December closing number stood at 1,568 units, reflecting seasonal trends and market adjustments.

Q. India is yet to achieve the milestone of 1 million tractor sales annually. In your view, what are the key challenges preventing this target from being met? 

India’s challenge in reaching the milestone of 1 million tractor sales annually stems from a combination of external and industry-specific factors. The fragmented landholding patterns in India, where over 80% of farmers operate on small or marginal plots, limit the demand for large-scale mechanization. Additionally, farmer incomes are highly dependent on seasonal factors, such as monsoons and fluctuating crop prices, which directly impact their purchasing power.

Industry dynamics also play a role, with the high cost of advanced tractors making them unaffordable for many small farmers. Furthermore, there is limited awareness and adoption of precision farming technologies, which could otherwise improve productivity.

We at CNH have introduced accessible finance solutions through our CNH Capital arm, making it easier for farmers to own a high-tech machine without putting burden on their pocket.

Q. Some stakeholders attribute the slowdown in tractor purchases to rental models becoming increasingly popular among small and medium landholders. Others point to government schemes that may inadvertently discourage ownership. How significant do you think these factors are in shaping current trends, and how is CNH adapting to this shift?

Tractor rental models and government schemes have indeed introduced alternative approaches for small and medium landholders, but these factors represent an evolution in how mechanization is accessed. They have helped make mechanization a more affordable and cost-effective process for farmers and landholders. However, there is still a gap as the mechanization level in India is below 50%.

We see these trends as an opportunity to expand the reach of advanced farming solutions. We are focused on building a balanced ecosystem with tailored solutions in our portfolio to suit both rental and ownership markets.

Q. In a year where challenges have persisted, what are CNH’s projections for the overall tractor sales market in India by the close of this fiscal year? Additionally, how does your company’s performance align with or deviate from these industry-wide expectations?

Despite a challenging start to the year, we project the overall tractor market in India to grow by approximately 3% in 2024. The initial slowdown, driven by factors such as uneven monsoon distribution, was followed by a strong recovery in the second half of the year, fueled by favorable monsoon conditions and robust rural sentiment.

In terms of our own performance, CNH has outperformed industry expectations. October 2024 saw the highest-ever monthly tractor sales for our company, with over 7,000 units sold, including exports. This growth has been reflected in our market share, which has increased 30 base points in 2024. This success is largely driven by our strategic expansion efforts and the launch of innovative products tailored to the evolving needs of the Indian farming community.

Q. CNH’s portfolio spans a diverse range of tractors. Could you provide insights into the most popular tractor models in your line-up and their appeal to farmers in India? How does the company differentiate itself in a highly competitive market, particularly in regions where small landholders dominate?

New Holland portfolio in India spans a diverse range of tractors, catering to the varied needs of Indian farmers with models offering horsepower from 29 HP to 100+ HP. Popular models like the Blue Series Simba 20/30 are compact tractors, ideal for small farmlands and tasks such as spraying, inter-cultivation, and orchard farming. These tractors are perfect for small to medium-sized agricultural operations. On the other hand, the WorkMaster 105 is first made in India Trem V tractor above 100 hp designed for large-scale farming with advanced features like a 3500 kg hydraulic lift capacity, enabling it to handle demanding tasks with ease.

What distinguishes New Holland tractors, are the advanced technologies incorporated into their designs, ensuring superior fuel efficiency and durability, even in challenging working conditions. The company emphasizes “Made in India” manufacturing, which not only serves the domestic market but also caters to export needs, showcasing its commitment to strengthening the local economy. In India harvesting and post harvesting segments are evolving and growing. CNH is a leader in sugarcane harvesting and baling.  Case IH sugarcane harvesters and New Holland balers have a market share of over 50%. Additionally, our robust dealer network of over 500 outlets ensures farmers receive extensive after-sales support, offering them the service and expertise required for sustained operational success.

Q. The baler market in India remains niche, primarily because farming practices are less institutionalized and often reliant on subsidies. What is CNH’s strategy for addressing this challenge? Do you see potential for growth in mechanized balers, and what role do you think policy support could play in driving adoption?

The high cost of farm equipment makes it challenging for farmers to afford mechanized solutions, and subsidies play a crucial role in helping them own such equipment. However, CNH sees significant potential for growth in the baler market, particularly driven by government initiatives like the SATAT (Sustainable Alternative towards Affordable Transportation) scheme, which seeks to establish 5,000 biogas plants, and policies mandating coal power plants to use biomass for 5% of their power generation. Additionally, the creation of district-level Biomass Banks could further support the industry and farmers.

At CNH, we have taken steps to address this challenge through our Corporate Social Responsibility (CSR) initiative, “Sustainable Environment Solution” (SES). This initiative involves donating New Holland baling equipment to train farmers, and in some cases, entire villages, to adopt crop residue management solutions instead of burning stubble. This not only helps farmers generate additional income by turning crop residue into biofuel, but also educates rural communities on the benefits of mechanization while reducing carbon emissions. Launched in 2017 in collaboration with the Punjab Department of Agriculture in the village of Kallar Majri, this initiative has since expanded to other areas. In 2024, New Holland sold over 600 balers, maintaining over a 50% market share despite industry challenges. CNH continues to innovate and localize baler production, making the equipment more accessible to both individual farmers and institutional buyers, positioning itself for continued growth in the mechanized baler market.

Also Read: IMMA Successfully Concludes 5th National Crop Nutrition Summit & B2B Expo 2025

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