Supreme Court order puts brake on sales of tractors, construction vehicles

Tractor and construction equipment vehicle makers’ business has had a near-freeze across the country since April 1.

Regional transport offices (RTOs) in most states have refused to register these vehicles after the Supreme Court order of last month, which stopped sales of two-wheelers, three-wheelers, passenger and commercial vehicles meeting only BS-III emission standards. 

The order was not meant for tractors, combines and heavy construction vehicles, which have different emission norms. However, the RTOs have declined to allow their registration. It was late last week when  Odisha and Gujarat resumed doing so. 

“Registration and sales of tractors are completely stalled. RTOs do not want to do anything that might form contempt of court. We are in touch with the Union ministry of road transport and expect it to issue a clarification,” said Rajesh Sinha, director (sales and marketing) at John Deere, a leading tractor maker. 

India is a large tractor market, with average monthly sale of 48,000 units. Mahindra & Mahindra is the largest. Rajesh Jejurikar, president of its farm equipment sector, would not comment on the issue.

The Central Motor Vehicles Rules have separate and distinct rules for emissions from agricultural tractors, power tillers, construction and earth moving vehicles, and combine harvesters. All these come under Rule 115A; other vehicles meant for transportation of goods and passengers are under Rule 115. 

Raman Mittal, executive director at Sonalika ITL, hopes the registration process to be back in place by the end of this month. “Our association is making the required representations. While this is a pan-India development, we do not expect this to disrupt business significantly,” he said.

Tractors follow the Bharat (Trem) Stage III A emission norms, different from the BS-III norms for other vehicles.  

Anand Sundaresan, president at the Indian Construction Equipment Manufacturers’ Association, says the Supreme Court order has been misunderstood by RTOs. “This is an important season for sales. We are not able to bill anything at most places. The detailed SC order came this Thursday and it only talks about vehicles under Rule 115. We now expect a clarification to emerge,” said Sundaresan, also vice-chairman and managing director at Schwing Stetter, a construction equipment maker. 

The impacted segment is valued at Rs 20,000 crore, with annual volume of 48,000 units. Sundaresan said the past 15 days had been a ‘nightmare’ for most entities, which have spent long hours with ministries and lawyers to address the situation. 

The SC order banning sales and registration of BS-III vehicles from April 1 shook many companies. Two-wheeler makers had to liquidate hundreds of thousands of BS-III stocks at hefty discounts. Commercial vehicle makers remain saddled with inventory of BS-III stock valued at a few thousand crores.