The current deferment was considered post the request from combined harvester manufacturers from Punjab.
The government may defer the implementation of new emission norms for the farm equipment sector yet again by one more quarter. The current deferment was considered after a request from combined harvester manufacturers from Punjab, said a senior industry executive.
The move may offer a temporary reprieve for three months to the manufacturers of combine harvesters, power tillers and tractors with an engine capacity higher than 50 horsepower (HP), who are already under pressure from sustained price increases.
The Centre had earlier decided to make Bharat Stage TREM IV emission regulations, which are equivalent to Euro Stage IV norms, applicable from October 1, 2022. However, this is the third time the government will postpone the date of implementation of these stricter emission norms for the tractor industry.
According to the apex body of domestic tractor industry Tractor and Mechanisation Association (TMA) the postponement was made on the request of combined harvesters’ manufacturers from Punjab to the Ministry of Road Transport and Highways (MoRTH).
The ministry had considered the request of combined harvesters’ manufacturers and gave them a relaxation of three months. As tractors are in the same category it will be applicable for this industry as well, said a senior representative of Tractor and Mechanisation Association (TMA).
Post implementation, the farm equipment prices are likely to go up by 10-15 percent. This expectation may have impacted demand in a marketplace that has seen a decent offtake around the festive season.
The extension affects eight percent of the overall tractor volumes while a big proportion of the overall industry of less than 50 HP will continue to be governed by TREM III A norms. However, post implementation, he highlighted that market share of the above 50 HP tractor will further contract due to the subsequent price hike.
“With revised norms, the prices of above 50 HP tractors are expected to go up by 15-16 percent in the range of Rs 1-1.25 lakh because of the new technology upgradation and usage of electronics. Going forward, India will continue to remain a mid-to-high HP tractor market and therefore the segment of above 50 HP may contract to five percent in the coming years due to increase in vehicle prices," Bharatendu Kapoor, Chairman of Marketing Committee at TMA told Autocar Professional.
In the last 12-18 months the tractor industry has seen around four or five rounds of price increase with the magnitude of 2-2.5 percent each. Industry experts believe that the recent deferment will provide a breather for about 70,000-80,000 tractors (size of 50 HP plus segment) that are set to see a significant price increase in the coming days.
In addition, the industry will see reconfiguration of categories as OEMs will revamp their product portfolio with tractors offering higher torque at lower HP that could lead to a shift towards 41-50 HP segment product mix at the expense of the over 50 HP segment.
Hence, the farm equipment manufacturers have continued with their manufacturing process as per the current industry standards till December end and can register their vehicles till June 2023.
Currently TREM-III A emission norms are applicable for tractors across various horsepower categories in India and were implemented in April 2010-2011.
A draft gazette notification on the emission norm extension was released on October 3 and the industry was given 30 days’ time to come up with any objections and suggestions from the stakeholders.
“No objections have been filed yet, so we are expecting that the deadline to comply with new emission norms for the tractor industry will be extended till December 31 and the new norms will kick in from January next year,” added Kapoor.
The revised emission norms for tractors were initially slated to be implemented from October 2020 when the ministry of road transport and highways (MoRTH) had notified amendments to the Central Motor Vehicle Rules 1989. That was initially deferred by one year and subsequently by another six months in the wake of the coronavirus pandemic.
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