ITL is shifting its focus to tractor exports from India due to challenges in major markets such as the EU and North America, driven by tariffs and geopolitical issues. The U.S. remains ITL’s second-largest export market. Exports have declined from the previous year, impacting overall industry performance, but signs of recovery are emerging.

ITL has decided to focus its tractor exports from India, rather than from the United States, as significant concerns arise from key markets like the European Union, North America, and South Asia due to geopolitical tensions and a global trade war. Gaurav Saxena, Chief Executive of International Operations, highlighted the challenges faced in markets such as Mexico and Canada, where changes in tariffs have led to hesitation from local partners to import tractors from the U.S.

The implementation of a 25% tariff by U.S. President Donald Trump on imports to Mexico and Canada has created a daunting climate for U.S.-based exports. Saxena noted this occurred shortly before a temporary pause on tariffs compliant with the USMCA until early April. ITL’s position is significant, as the U.S. remains its second-largest export market after the EU.

In the fiscal year 2023-24, ITL exported a total of 33,600 tractor units, a reduction from 35,000 units in 2022-23, equating to approximately 35% of India’s total tractor exports. Competitor Mahindra & Mahindra also faces market rot amid economic challenges, with Hemant Sikka, President of the Farm Equipment Sector, mentioning that the tractor industry has seen a downturn for 13 consecutive quarters, though signs of recovery are beginning to surface.

ITL’s exports to Ukraine and Russia have witnessed a significant drop, plummeting from about 1,000 units annually to negligible levels due to ongoing regional instability. Companies in the sector are adapting to these evolving market dynamics as they strive for recovery and resilience in the face of adversity.

In summary, ITL’s strategic pivot to prioritize tractor exports from India reflects the pressures stemming from tariffs and geopolitical tensions, particularly in significant markets. With the U.S. being a crucial export region, the overall decline in tractor exports signifies broader challenges within the industry, notably from competition and market fluctuations. Both ITL and Mahindra & Mahindra are navigating tough conditions but are hopeful for gradual recovery in tractor demand.

Original Source: m.economictimes.com

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