Why India imports the farm equipment it should be making
SRF Capital Studio Research DeskFunding Intelligence, SRF Capital StudioIndia exported more than a lakh tractors in 2024, and in the same year its combine harvester imports from China nearly tripled.
Summary
- India imported about $450 million of farm machinery in 2024, and nearly two thirds of it was harvesting machinery, most of it Chinese.
- These imports persist because the first Indian maker of a new harvester faces years of losses that no lender, buyer or subsidy rule now shares.
- The opening is the fleet buyer: hiring centres and farmer groups whose orders could carry a new Indian machine through its proving years.
A custom hiring centre rents machines to farmers who cannot afford to own them. At harvest its owner has one fear: a combine that stops in the field. So when he buys, he asks two things. Has this model survived seasons like mine? Can a spare part reach me within a day?
The trade figures for 2024 suggest that more buyers are answering with an imported machine, and that most of those machines are Chinese.
What farm machinery does India import, and how much?
India's customs data, as reported to UN Comtrade, show farm machinery imports of about $450 million in 2024. At the year's average rate of about ₹84 to the dollar, that is roughly ₹3,800 crore. It is small beside the tractor trade, which runs heavily the other way.
India's trade in farm machinery, calendar 2024, US$ million
| Machinery (HS code) | Imports, $m | Exports, $m | Balance, $m | Largest supplier |
|---|---|---|---|---|
| Tractors (8701) | 15.3 | 1,113.1 | +1,097.8 | Japan, $4.5m |
| Soil preparation: ploughs, harrows, tillers, seeders (8432) | 97.5 | 194.4 | +96.9 | China, $90.0m |
| Harvesting and threshing machines (8433) | 282.2 | 94.0 | -188.2 | China, $185.6m |
| Other farm and poultry machinery (8436) | 69.9 | 32.5 | -37.5 | China, $44.7m |
India is a large net seller of tractors and of the machines that prepare soil. It is a net buyer of the machines that harvest, thresh and handle crops.
The deficit sits almost entirely in harvesting machinery, where imports were three times exports.
Harvesting imports also grew fast. They rose from $161 million in 2023 to $282 million in 2024, an increase of about 75%.
Where do India's imported harvesters come from?
One product leads: the combine harvester, which cuts, threshes and cleans grain in a single pass. Imports rose from $65 million in 2023 to $169 million in 2024. China supplied nearly three quarters of the 2024 total, and Thailand most of the rest.
India's imports of combine harvester-threshers by supplier, 2023 and 2024
| Supplier | 2023, $m | 2024, $m | Units, 2024 | Average declared value, 2024 |
|---|---|---|---|---|
| China | 44.4 | 121.8 | 17,808 | about $6,800 |
| Thailand | 19.4 | 45.5 | 2,136 | about $21,300 |
| Japan | 0.8 | 0.6 | 71 | about $7,900 |
| All suppliers | 65.5 | 168.7 | 20,246 | about $8,300 |
The two main suppliers sell different machines. A Chinese unit was declared at about a third of the value of a Thai one. That points to many small, low-cost Chinese machines beside fewer large ones. Customs codes do not record the model, so treat this as a reading of averages. Treat the unit count with care as well. At 20,246, it exceeds Ken Research's estimate of about 15,600 new combines bought in India in 2025 from all sources.
Europe barely features. Italy, the Netherlands, Germany and Belgium together sent about $25 million of harvesting machinery in 2024. Market commentary often describes India's import bill as expensive European precision kit. By value, that is a small corner of it.
Why haven't Indian makers taken this business?
India does make combines. Brands such as Malkit, Vishal and Shaktiman sell machines built here. Market research firms such as Expert Market Research report that imports cluster in types Indian makers sell few of, chiefly tracked machines that can work wet paddy fields.
For an Indian firm that wants to build those, five problems arrive together.
The rival machine is already proven
An imported combine comes with years of sales behind it and a settled design. An Indian first model costs more to make, because its maker has not yet built in volume. Costs fall with volume, and volume needs buyers who trust the machine.
Buyers will not test a new machine at harvest
A breakdown in a short harvest window can leave a crop standing in the rain. So operators pay for evidence: seasons of field use on soils and crops like theirs. A new machine has none on its first day, however good it is.
The service network has to come before the sales
A harvester needs parts within a day or two and mechanics who know it. That network costs money years before sales justify it. An importer with a regional distributor can often promise that sooner than a new Indian factory.
Someone else owns the best designs
Threshing systems, hydraulics and guidance software in a mature machine are protected. A licence usually limits what the licensee may build and where it may sell. By the time an Indian design catches up, the licensor has moved a model ahead.
Lenders see a long wait and a monsoon market
A new harvester line takes years to pay back, and farm machinery sales rise and fall with the rains. Banks price that risk high. Few venture funds back heavy manufacturing with slow returns.
Does India's farm machinery subsidy favour imported machines?
SMAM, the central scheme that subsidises farm machinery, pays the same share whatever a machine's origin. Its guidelines, revised in August 2026, make a maker eligible once a state empanels it. That needs a valid test report from an approved testing institute, a warranty and after-sales service. We found no country-of-origin condition in them.
The share is 40% of the price for most buyers. It is 50% for Scheduled Caste and Scheduled Tribe, small, marginal and women farmers, and for farmers in the north-east. Each machine has a cap: ₹9.6 lakh for a self-propelled combine at the higher rate.
The guidelines steer combines towards hiring centres and machinery banks, which get 40% of project costs on projects up to ₹250 lakh. Border protection is thin as well. Third-party tariff listings put basic customs duty on combines at 7.5%. GST on farm machinery fell from 12% to 5% in September 2025, for imported and Indian machines alike.
An illustration with round prices shows how an equal share works against a newcomer. A hiring centre compares an Indian combine at ₹20 lakh with a proven import at ₹25 lakh. After a 40% subsidy they cost ₹12 lakh and ₹15 lakh. A ₹5 lakh price advantage shrinks to ₹3 lakh, while the import keeps its field record.
Who pays while India keeps importing harvesters?
Hiring centres pay the importer's price, and the farmers who rent from them pay rental rates built on it. The subsidy budget pays too. SMAM's central assistance came to ₹9,404 crore from 2014-15 to 2025-26, per the government's July 2026 backgrounder. The share spent on imported machines builds demand for factories abroad.
There is a slower cost as well. Every season an Indian design is missing from the field is a season of reliability records it does not collect. India's tractor makers, now exporters on a large scale, show what years of volume do for an industry.
What would make an Indian harvester worth building?
The fix is to share the proving years, and each way of doing it has a cost.
The first is to use fleet orders as early demand. Hiring centres and farmer producer organisations buy in numbers. SMAM counted 27,554 custom hiring centres by February 2026. A state that pooled their orders for a tested Indian machine would give its maker volume and field records together.
Testing can do more work too. SMAM already requires a test report. Publishing field-hour and breakdown results by model would give a new maker evidence it cannot otherwise show.
A higher subsidy for an Indian-built version is the bluntest tool, and it costs farmers some choice while it lasts. If used at all, we would limit it to a fixed period and to machines with a passed test report.
Money has to be patient as well. A loan cannot wait years for a first sale, but grants and blended finance can carry a maker until orders exist.
What should a farm machinery founder or investor do now?
- Build for the fleet buyer. SMAM steers combine subsidies to hiring centres and machinery banks, so design, price and warranty for them first.
- Get the test report early. A report from an approved farm machinery testing institute is a condition of SMAM eligibility, and it is the first proof a buyer asks for.
- Start with service. Parts, repairs and retrofits for imported combines already in the field build a network and teach you their failures before you build a whole machine.
- Fund design with grants and the plant with debt. Capital grants suit research and prototypes; blended debt suits plant and working capital once orders exist. Scheme matchmaking finds the schemes that fit.
- Cost every rival line by line. Duty differs by tariff item, so check each imported machine and part against the CBIC schedule before you set a price.
The wider sector, from tractor margins to dealer economics, is set out in our report on the farm equipment industry in India. Why mechanisation still misses small farms is the subject of our note on farm mechanisation. Our agritech practice works with makers and lenders in this space.
Frequently asked questions
Why does India import agricultural machinery?
Mostly for harvesting. Indian makers sell few of the combine types that farmers and hiring centres now buy in growing numbers. Imported models arrive proven, and neither the subsidy nor the customs duty favours a new Indian design.
What is the import duty on agricultural machinery in India?
It depends on the tariff item. Third-party tariff listings show 7.5% basic customs duty on combine harvesters and 10% on tractors and some other harvesting machines. GST on farm machinery has been 5% since 22 September 2025. Check the CBIC tariff for your item.
Which agricultural machinery does India import from China?
Mainly harvesting machinery: $186 million in 2024, of which combines were $122 million. China also supplied $90 million of soil preparation machines and $45 million of other farm machinery, per UN Comtrade.
How big is the combine harvester market in India?
There is no official figure. Ken Research puts it at about $365 million in 2025, and other firms publish lower estimates. Imports alone were $169 million in 2024, so imported machines are a large share on any estimate.
How much does India earn from tractor exports?
About $1.11 billion in 2024, roughly ₹9,300 crore, for 101,392 tractors, per UN Comtrade. The United States was the largest buyer, at $253 million.
Trade figures are India's reported data for calendar 2024 from UN Comtrade, read through the World Bank's WITS database in October 2026.
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