How fast is Tractor Industry Electrifying?

The Indian tractor industry has experienced significant growth in recent years, establishing itself as the world's top tractor producer since 2013. With India being one of the leading agricultural producers globally, the demand for agricultural equipment, especially tractors, is expected to rise. Additionally, India exported 125,000 tractors in 2021, further highlighting the industry's potential. Amidst this growth, an emerging trend in the tractor industry is the adoption of electric tractors as an alternative to conventional diesel engines. As the Indian government promotes hybrid electric vehicles to reduce pollution, there is a significant push for electric tractors in the agricultural ecosystem. In this context, our company aims to assist tractor companies and OEMs in navigating this transition and providing strategic solutions.

The Rise of Electric Tractors:

The concept of electric tractors, powered by electric motors and strong batteries, is gaining momentum in India. The government's focus on reducing noise and air pollution has led to substantial subsidies for electric tractors at both the state and central levels. Electric tractors offer various advantages, including affordability, low maintenance, increased capabilities, and energy efficiency. Farmers stand to benefit significantly from the integration of electric drives in tractors and other equipment, aligning with the government's sustainable and energy-efficient agriculture objectives.

Understanding the Government's Long-Term Approach:

Tractor manufacturers need to understand the long-term perspective of the Indian government regarding the electrification of the agricultural sector. The government's ambitious goal of achieving net-zero emissions by 2070 has driven the push for electrification, considering that tractors contribute significantly to carbon emissions in the agricultural sector. With diesel engines as their primary power source, tractors consume approximately 8% of India's annual oil consumption and account for 60% of total agricultural fuel usage. Tractors consume a similar share of diesel fuel as buses but currently lack efficiency standards. In light of these factors, the government has been actively promoting the adoption of electric tractors through subsidies and incentives.

High Growth Potential for Electric Tractors:

The Indian electric tractor market is projected to experience a remarkable growth rate of 21.5% (CAGR) between 2021 and 2027. This sector presents substantial growth potential compared to other segments, prompting many manufacturers to consider large-scale projects and invest in research and development. With India's target of achieving net-zero emissions by 2070, it is expected that the government will make significant efforts to promote electrification and sustainability in the agricultural sector. This favorable environment further reinforces the viability and potential success of electric tractors.

Preparing for the Shift:

Tractor manufacturers and OEMs must assess their product offerings and conduct extensive market research to understand the various aspects of the electric tractor market. Battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), and plug-in hybrid electric vehicles (PHEVs) are likely to dominate the electric tractor market in the near future. Conducting thorough research on battery technology, storage capacity, and their impact on sales will be crucial in making informed strategic decisions. Avanteum, can assist tractor companies and OEMs in this process by providing market insights, conducting feasibility studies, and developing tailored strategies for electrification.


The rise of electric tractors presents both challenges and opportunities for tractor companies and OEMs in India's agricultural ecosystem. The government's emphasis on sustainability and the ambitious net-zero emissions target by 2070 have led to significant subsidies for electric tractors, fostering a favorable environment for their adoption. However, to navigate this transition successfully, companies need to reassess their product offerings and conduct comprehensive market research.