Tractor sales in India reached a record high in 2017 as farmer sentiment improved with the return of generous rains.
Domestic sales rose 16% last year to 659,304 units, the Tractor Manufacturers Association reports.
In India, where irrigation infrastructure is lagging, spending by farmers and in rural villages is largely dictated by rainfall. Tractor sales declined for two straight years in 2014 and 2015 -- the first two years of the Narendra Modi government -- amid parched conditions. The rains returned in 2016 and tractor sales in that year jumped 17% to nearly 570,000 units, gaining momentum right up until the government suddenly introduced banknote demonetization, causing a temporary cash crunch.
The withdrawal of large-denomination banknotes from circulation hit villages through the start of 2017. But after that shock, the demand for tractors continued steady growth, ultimately surpassing 600,000 units for the first time since 2013.
India's Mahindra and Mahindra the world's largest tractor company controlling more than 40% of the domestic market, logged a 6% rise in sales to 76,943 units in the October-December quarter alone. The company said the return to average rainfall and plentiful reservoirs have encouraged villagers to spend on major purchases like tractors.