In a significant move aimed at protecting the interests of small and marginal farmers, the Indian government is set to postpone the implementation of the stringent TREM V emission norms for tractors below 50 horsepower. Instead, authorities are planning to introduce a mid-path emission standard to prevent a sharp increase in tractor prices, according to official sources.
A Middle Path for Emission Control
The Centre is offering substantial relief to tractor manufacturers by delaying the rollout of the Tractor and Machinery Emission Standards V (TREM V) for the crucial below-50 HP segment. This category is the backbone of the Indian tractor market, contributing to a staggering over 90% of total tractor sales in the country, which is the world's largest tractor market by volume.
Currently, a regulatory disparity exists where tractors below 50 HP adhere to the older TREM IIIA norms, while their larger counterparts above 50 HP follow the more advanced TREM IV standards. The government's original plan to upgrade all categories to the strict TREM V norms from next year would have forced smaller tractors to make a technologically demanding and costly leap.
The new strategy involves creating an intermediate standard positioned between TREM IV and TREM V, specifically designed for the sub-50 HP segment. This intermediary step is intended to limit the extent of electronic changes required in tractor engines, thereby keeping a check on the final price for farmers.
Addressing Cost Concerns and Industry Apprehensions
A direct transition to TREM V compliance was estimated to increase tractor prices by a substantial 15-20%. To put this in perspective, a 45 HP tractor currently priced at approximately ₹7.80 lakh under TREM IIIA norms could see its cost surge to between ₹8.97 lakh and ₹9.36 lakh under full TREM V standards.
This potential price hike raised serious concerns about affordability for India's vast population of small and marginal farmers. The government's middle-path approach seeks to tighten emission regulations progressively without rendering essential farm machinery financially out of reach.
The tractor industry, home to major players like Mahindra & Mahindra, Sonalika, TAFE, Escorts Kubota, and John Deere, had been actively lobbying for this relief. Manufacturers highlighted the challenges of surging costs and supply-chain constraints, arguing that full TREM V compliance necessitates complex electronic systems and sensors that are not only expensive but also potentially difficult to service in harsh rural conditions.
One official pointed out a unique Indian context: unlike in many Western nations, Indian tractors primarily operate in agricultural fields. The official noted that the dust from soil already contributes significantly to particulate matter levels, suggesting the need for an India-specific approach to emission standards.
Broader Implications and Future Outlook
This regulatory reconsideration is crucial for India's $9.4-billion tractor market. The revised emission norms are now expected to take effect from 1 April next year, but the government has indicated flexibility on this deadline, pending formal guidance from the Ministry of Agriculture.
Experts warn that the cost implications of a direct shift to higher emission standards could negate some benefits of recent policy support. Ashim Sharma, senior partner at Nomura Research Institute (NRI) Consulting, explained that the TREM V transition requires significant technological upgrades, including combustion improvements, exhaust after-treatment systems, and advanced sensors.
These potential cost increases come at a time when the government recently reduced the GST on tractors from 12% to 5% to boost affordability and farm mechanization. Industry data indicates India's current farm mechanization level stands at 47%, lagging behind countries like Brazil (75%) and China (60%).
Farm leaders have echoed these concerns. Jagjit Singh Dallewal, farm leader and convenor of the Samyukta Kisan Morcha (Non-Political), urged the government to avoid implementing harsher norms that could add to the debt burden of farmers.
As the industry continues to develop the mid-standard version, which is expected to be less expensive than a full TREM V upgrade, the final decision awaits the formal release of a committee report commissioned by the agriculture ministry. The move represents a careful balancing act between environmental responsibility and economic practicality in one of India's most critical agricultural sectors.
