The document discusses the opportunities for agricultural equipment in India. It notes that India has high potential for growth in farm productivity and mechanization due to its large arable land, year-round cultivation, and population engaged in agriculture. However, farm mechanization levels are currently low compared to other countries. There is vast scope for mechanization across the agricultural value chain from tillage and planting to harvesting and post-harvest activities. Success in the Indian market requires right-sizing equipment for local needs and ensuring adaptability. Escorts aims to drive change in Indian farming through leveraging its 50+ years of experience in India and globally.

1. Changes needed in Agriculture Equipment Future Imperatives Presented by – Rohtash Mal, President – Tractor Manufacturers Association, India Member CII National Committee on Rural Development, India ED & CEO Escorts Ltd

2. “ Emerging India” A Fast Growing Market

3. India is set to become 3 rd Largest Economy by 2014 (%) Population growth is slowing Literacy is rising GDP Ranking – PPP 4 th , Nominal 11 th Agriculture growth draws highest attention from Government of India to take the overall GDP growth in double digit figure. 1.0 3.5 6.0 8.9 GDP - 28 years of high growth 0 2 4 6 8 10 1900-1950 1950-1980 1980-2002 2002-2009 1.0 2.2 2.1 1.8 1.5 0 0.5 1.0 1.5 2.0 2.5 1901-1950 1951-1980 1981-1990 1991-2000 2001-2010 (%) 17 52 65 80 0 20 40 60 80 100 1950 1990 2000 2010 (proj) (%)

4. India has a Vibrant Private Space 100 Indian Companies have market cap of over US$ 1bn 1,000 Indian Companies have received foreign institutional investment 125 Fortune 500 companies have R&D bases in India 390 Fortune 500 companies have outsourced software development to India 2% bad loans in Indian banks 80% credit goes to private sector

5. “ Indian Agriculture” Snap Shot and Potential

6. INDIAN AGRICULTURE STRENGTH Highest Arable Land - 47% of total land against Avg. 11 % in the world Round the Year Cultivation - 20 Agro-climatic regions and 46 Soil types suited for round the year cultivation Ranks first in production of Pulses, Tea, Jute and allied fibers Second largest producer of Wheat, Rice, Groundnut, Fruits and Vegetables, Sugarcane & Third largest producer of Mustard, Potatoes, Cotton lint, etc. 102.8 Million Farmers, over 7.5% owns > 4 ha. Avg farm land size <2 ha, Bottom of the Pyramid country, Tractor HP category ranges from 25 HP to 65 HP. Majority falls between 35 – 45 HP category Average Land Holding and Number of Farmers

7. Key Drivers for the Agricultural Equipment Industry: The Agricultural Equipment market is driven by several factors GOVT. INVESTING 244 Mil $ PER DAY IN RURAL DEVELOPMENT

8. Potential Exists in Improving Farm Power per Hectare Source : World Bank Despite India is Largest Tractor Producer HP / Ha is low. West Germany Italy UK France Poland Korea USA Turkey Brazil Russia Pakistan India

9. Credit Squeeze Credit Squeeze, Drought and Stock Correction Credit Squeeze & Drought CAGR 1974-79 : 15% 1980-85 : 1% 1986-91 : 13% 1992-97 : 11% 1998-03 : -9% 2004-09 : 10% Largest Tractor Market in World, Set to cross 500,000 tractors a year mark, Upsurge in demand to continue Indian Tractor Industry Trend

10. Source: Sinocast China Business Daily, 01/04/2006 United States [2.4%, 95%] Western Europe [3.9%, 95%] Former Soviet Union [14.4%, 80%] Argentina [9.4%, 75%] India [52%,30%] China [64.9%, 38%] Africa [60%, 20%] ( ) Figures indicate population engaged in Agriculture & level of farm mechanization Agriculture: Engaged Population & Farm Mechanization Huge Gap in Mechanization levels Brazil [14.8%, 75%]

11. Mechanization Potential Across Ag Value Chain Tillage& Seedbed Preparation Sowing/ Planting Fertiliser Application Irrigation Harvesting Post Harvesting Inter Cultivation Plant Protection Crop Cycle Rice Horticulture Sugarcane Potato Maize etc Grains Horticulture Sugarcane Potato Maize etc Straw/stalks Forage All Crops All Crops Storage Trash Management All Crops All Crops Crop Care Mechanisation High Low

12. Huge Potential in Tillage and Seeding & Planting Global Scenario Current Indian Practice Right size and price are imperative for leveraging the potential

13. Enormous Scope Exists in Plant Protection Mechanisation Global Scenario Current Indian Practice Appropriate technology shall give the first mover advantage

14. Grain Harvesters in India are limited to few crops and Geography Global Scenario Current Indian Practice Small but efficient harvester for all crops needed

15. Shortage in Farm Labour Pushing Mechanization in Harvesting Solutions Global Scenario Current Indian Practice Sugarcane & Cotton harvesting is high priority Agenda

16. Vast Potential is opening up in Hay Forage and Trash Management Global Scenario Current Indian Practice Emerging market for Baler, Chopper and Silage equipment

17. Key To Success In Indian Market Right sizing of technology & Adoptability

18. Why Adaptability is so Paramount in Indian Context? Some case stories

19. Long Haulers Unilever (HLL) BAT (ITC) Suzuki Motor / Maruti Recent Starters Hyundai Motor LG Samsung GE Some Success Stories Localisation Is All Very Well But these are the true road warriors

20. Success in India …what made it happen?

21. General Motors Ford Kellogg Pepsi Coke Enron Electrolux Whirlpool Reebok/Nike/Adidas …… .. and the list goes on. “ Failures”

22. Failures in India… why ?

23. Long haul market, ‘hang in there’ Not for the faint-hearted Under-investing as bad as over-investing Demands strategy complexity –folks and strokes What India means today-Rx An amazing opportunity to Fail….. Or Succeed

24. Build costs in tandem with revenues Needs international fundamental questions-not solutions Exist on Earth and Mars concurrently in terms of market and technology practices What India means today-Rx An amazing opportunity to succeed …… ..…or to fail

25. Sum up Indian Economy is growing on a sustainable model. Agriculture growth is a Top Priority Agenda with Indian Govt. Abundant potential in farm productivity and mechanization exist. Adoptability for Right size, technology and Price is key to success.

26. “ ESCORTS GROUP” Strive to propel change in the Indian Farming Landscape by leveraging its expertise build over 50 years’ experience in India & Global markets.

27. Escorts Businesses

28. Escorts Businesses Agri. Machinery Group Escort is a Technology Driven, Customer Focused Company with a world class Research and Development Center. Has global footprint spread across 20 countries Escorts is the first tractor manufacturer in the world which has been awarded TS 16949 Certification.

29. Thank You! Jai Kisan