Transitioning to the New Emission Norms and What to Expect | TractorGyan

12 Jan, 2023

The Indian tractor industry has always been prone to changes and unseen fluctuations. And with the new Emission norms out, it is only evident that one should expect a drastic change in tractor Horsepower wise mix.

The ICRA has released tractor emission new norms, emmision norms are rules set up by the Indian government to regulate the pollutant varients emitted by tractors to ensure clean optimum health of the environment.

ICRA released new emission norms for Indian tractors in the last month of December 2022, initially, these norms were supposed to be regulated in the year 2020 but just like the pandemic has affected every aspect of the world, the Indian Agriculture sector was no exception. Let’s look at the highlights as to what these emission norms are and what to expect from them.

Emission Norms

1. Application: Initially ICRA intended to regulate new emission norms in the year 2020 but it got delayed thanks to the pandemic. The newly revised emission norms standards are meant to be brought into action in the first month of 2023, in January. The emission standards will affect the cost of tractors in the >50 HP category by 10-15%.

2. World: India has until now lagged in the area of emission norms in developed markets which can be seen from the fact that the norms were supposed to be regulated in October 2020, the transition was interrupted multiple times, with the government delaying the process due to the pandemic.

3. Indian Tractor: India has always been an average to high Horsepower tractor market, with 80% of the sales coming from 30-50 HP categories, although the revised emissions norms which are about to be applicable in January 2023 would be regulated only on >50 HP tractors impacting 7-8% of the overall industry volumes.

4. Client: Technology advancement is already through the roof, and the tractor manufacturing technology is no other, the latest models of tractors currently in transit by OEMs are made by following the current emission norms, so the firms won’t have to face massive change in pricing but it is the client base that has to go through the price hike and bare the costs being a price sensitive farming community.

5. New Products: The OEMs have started the process of rearranging their products as per the revised emission norms of the current stage, Bharat TREM IV which is to be regulated from 2023 January. These changes are to be made on >50HP tractors with tractors offering higher torque at lower HP tractors as an addition to the portfolio, which would make room for an HP-mix shift with respect to lower horsepower tractors (41-50HP) earning because of the >50 HP segment.

Conclusion

In conclusion, it is only safe to say that the revised emission norms are likely to affect the cost of >50 hp range tractors with a hike of a good 10-15% and gradually affect the farmers.

These norms are also likely to make a shift in the HP-wise tractor mix >50 HP tractor segment (8% sales in the financial year 2022) expected to shrink.

SOURCE: ICRA

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