BS-TREM 4 Introduced: Diesel tractor prices will rise in 2023

Tractor prices increase in 2023: Farmers will get expensive tractors due to BS-TREM IV implementation

A global contribution towards carbon neutrality has led governments worldwide to design new policies. In this regard, the Indian government has taken a new step towards deciding a new emission norm, i.e. TREM 4. According to the norm, off-road diesel engines are used in agricultural pieces of equipment and construction vehicles with over 50 HP of power.

This revised norms for 2023 will be responsible for 10-15% hike in tractor (of category 50 Hp and above) production costs in India. An ICRA report says that tractor manufacturers will pass on this increase in costs to customers. Furthermore, the report says the production costs of tractors will hike by Rs 1-1.3 lakhs.

On the positive side of this news story, the tractor category (50 Hp and above) constitutes only 7-8% of the overall tractor market in India. In other words, data suggests the majority of revenue comes from the sale of tractors in the 30-50 Hp category. Furthermore, with the introduction of lower horsepower and higher torque combinations, the tractor category of 41-50 HP will further witness a boost in market share from its previous share of 53% in FY’22.

Additionally speaking, technical upgrades as per new carbon emission norms are readily available due to international import norms. The tractor brands have already been manufacturing tractors with such suitable technology. However, in India, the tractor industry is lagging behind due to the pandemic.

Experts say these major technological upgrades will include sections like fuel injection systems, air handling systems, diesel oxidation catalysts, exhaust gas recirculation systems, selective catalyst reduction systems, and diesel particulate filters.

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