In an attempt to revitalize Pakistan’s agricultural machinery industry, the government is exploring the establishment of a local assembly line for Belarusian tractors. Special Assistant to the Prime Minister on Industries and Production, Haroon Akhtar Khan, chaired a high-level meeting with representatives from private sector investors and major local manufacturers, such as Margalla Heavy Industries Ltd., Heavy Industries Taxila, and Green Corporate Initiatives, to discuss the details of this ambitious plan. The tractors will be imported as Completely Knocked Down (CKD) kits, which will be assembled locally in Pakistan, with a focus on tractors in the 57–80 horsepower range.
This initiative comes at a crucial moment in Pakistan’s agricultural sector, which has been reeling from multiple challenges, including poor farm mechanization, weak agricultural growth, and the aftermath of devastating floods that have ravaged vast swathes of farmland. The country’s agriculture has long suffered from low mechanization, with only a small fraction of Pakistan’s farms utilizing modern farming equipment like tractors. The government is hoping this partnership with Belarus will help alleviate some of these issues while giving a much-needed boost to an underperforming sector.
The local assembly of Belarusian tractors is expected to meet a market demand for affordable, reliable machinery that can help increase productivity on farms. The initiative also offers a chance to boost foreign investment, create jobs, and address Pakistan’s dire need for farm mechanization. However, the question remains: can Belarusian tractors truly make a significant dent in an already competitive market that has been dominated by local players for decades? Let’s explore what this means for Pakistan’s agricultural machinery market, its existing players, and the broader agricultural landscape.
The struggles of Pakistan’s tractor industry
To understand the potential impact of Belarusian tractors, we must first examine the current state of Pakistan’s tractor industry. The sector is dominated by two major players: Millat Tractors and Al Ghazi Tractors. These companies have long held the majority of market share in Pakistan’s agricultural machinery sector, with Millat Tractors assembling Massey Ferguson tractors and Al Ghazi Tractors producing New Holland tractors. Together, they command a substantial portion of the market, and their brand names have become synonymous with farm equipment in the country.
Millat Tractors, which has been a major player in the Pakistani market since 1964, has witnessed some of its most challenging years recently. For the financial year ending June 30, 2025, Millat Tractors reported a staggering 43% decline in revenues, falling from Rs91.5 billion to Rs52.1 billion. Despite efforts to control costs and improve its gross margin, which rose from 23.4% to 26.6%, the company’s profit after tax slid by 38%, amounting to Rs6.37 billion. This sharp downturn occurred even before the monsoon floods of 2025, which wreaked havoc on millions of acres of farmland, pushing farmers further into financial distress.
The company’s decline in performance has largely been driven by a softening demand for tractors. Millat Tractors sold only 18,580 units in FY25, down from 30,203 units in FY24, a 38% drop. While the company managed to improve its gross margins through pricing and cost discipline, the volume drop left a significant hole in its bottom line. The floods that followed only exacerbated the situation, with much of Punjab’s fertile farmland submerged, further weakening demand for agricultural machinery as farmers struggled to recover.
The outlook for Al Ghazi Tractors, another dominant player in the sector, is similarly concerning. Al Ghazi’s product mix has shifted towards larger tractors, as these tend to offer higher margins and are in demand for larger farms. While the company has reported a solid performance in recent years, 2025 has seen softer results due to economic challenges. Despite these setbacks, Al Ghazi’s brand strength and market position continue to keep it as a key competitor in the tractor market.
Moreover, these declines come in the midst of a broader crisis in Pakistan’s agricultural sector. The catastrophic floods of 2025 affected millions of people and devastated around 2.5 million acres of farmland in Punjab. This natural disaster placed additional strain on the agricultural industry, leading to an even weaker demand for farm machinery as farmers focused on immediate recovery efforts rather than investing in new equipment.
What can Belarusian tractors do for Pakistan?Â
The proposed Belarusian tractor initiative could offer a fresh approach to the market. By establishing a local assembly line for Belarusian tractors, the government aims to lower production costs, reduce reliance on imports, and make modern agricultural machinery more accessible to Pakistan’s farmers. The plan is to assemble tractors in the 57–80 horsepower range, which are suitable for a range of farming needs, from small to medium-sized farms. According to estimates, there is potential for assembling 2,800 units over the next five years, a modest but promising figure.
Belarusian tractors are known for their durability and cost-effectiveness, which could make them an attractive option for farmers in Pakistan. By assembling them locally, the government hopes to reduce their cost and make them more affordable to a broader segment of the agricultural community. Furthermore, the partnership with Belarus could foster stronger business-to-business ties between the two countries, potentially opening up new avenues for trade and investment.
The market potential for Belarusian tractors in Pakistan appears to be substantial, but success depends on several critical factors. First, there’s the matter of pricing. Millat Tractors and Al Ghazi Tractors have extensive dealer networks and after-sales support, which is a significant competitive advantage. Belarusian tractors would need to compete not only on price but also on reliability, serviceability, and availability of spare parts. If Belarusian tractors are priced competitively and perform well, they could capture significant market share, especially in the lower-horsepower segments that are seeing growing demand.
Moreover, the government’s subsidy programs could play a crucial role in driving the adoption of Belarusian tractors. The Punjab Green Tractor Scheme, launched in 2024, aimed to offer subsidies for farmers purchasing tractors. With the recent floods leaving many farmers without functioning machinery, the need for subsidies is more pressing than ever. If the government decides to include Belarusian tractors in these schemes, it could provide a major boost to sales. However, the implementation of these subsidies must be efficient and timely, or else the initiative could fall short of its potential.
A deeply fragmented market
While Belarusian tractors have the potential to make a significant impact, they will enter a deeply fragmented market with entrenched competitors. Millat Tractors has a legacy and a significant brand presence. Many farmers are loyal to Massey Ferguson tractors, which have long been associated with quality and reliability. Moreover, the company’s after-sales service and extensive parts network give it an edge in terms of customer satisfaction and support.
Al Ghazi Tractors, though facing challenges, has a similarly strong market position, with the New Holland brand being highly regarded for its performance and durability. The company’s shift toward larger tractors is in line with the growing demand from larger farms, but it remains to be seen whether this will alienate smaller, more budget-conscious farmers who may be drawn to Belarusian tractors.
Additionally, there are several other players in the market, including Farm Dynamics, a dealer for John Deere, and several export-focused companies. These smaller players, while not as dominant as Millat or Al Ghazi, contribute to the fragmented nature of the market. The entry of Belarusian tractors could spark more competition, particularly in the mid-range horsepower category, where demand for affordable yet reliable tractors is growing.
One of the biggest challenges Belarusian tractors will face is overcoming farmer skepticism. Many farmers have longstanding relationships with existing manufacturers, and the perceived risks of switching to a new brand may deter adoption. Furthermore, while Belarusian tractors may be priced competitively, the ability to provide the same level of after-sales service as established players will be crucial to their success.
What does this mean for farm mechanization?Â
Pakistan’s agricultural sector is in desperate need of modernization. Mechanization, which has been slow to take off, could be the key to improving productivity and tackling the country’s growing food security concerns. According to the World Bank, Pakistan’s tractor density is one of the lowest in South Asia, with just 6.2 tractors per 1,000 hectares of land, compared to India’s 11.7 tractors per 1,000 hectares.
If Belarusian tractors are able to gain traction in the market, it could lead to a broader transformation of Pakistan’s agricultural sector. The introduction of affordable, reliable machinery could enable farmers to increase productivity, reduce labor costs, and improve crop yields. This, in turn, could lead to higher incomes for farmers and help address some of the country’s food security challenges.
Moreover, the local assembly of Belarusian tractors could stimulate job creation and boost industrial capacity in Pakistan. By reducing import dependency, the government could strengthen the local economy and foster further investment in the agricultural machinery sector. This could also create opportunities for small-scale entrepreneurs and businesses that provide services such as tractor rentals and maintenance.
However, for these changes to materialize, a lot will depend on how effectively the government can implement this initiative. Subsidies must be timely and sufficient, the local assembly process must be efficient, and Belarusian tractors must prove themselves in the competitive local market. If these hurdles can be overcome, Belarusian tractors could be the catalyst for a much-needed transformation in Pakistan’s agricultural machinery market.
A long road ahead
The entry of Belarusian tractors into the Pakistani market presents an exciting opportunity to modernize the country’s agricultural sector. While there are significant challenges to overcome, including competition from established players and the need for efficient subsidies, the potential rewards are substantial. If successful, this initiative could help Pakistan catch up with its neighbors in terms of agricultural mechanization and boost productivity in a sector that has long struggled to keep pace with modern demands.
For now, the market remains deeply fragmented, with entrenched players like Millat and Al Ghazi holding strong positions. But with government backing, private sector interest, and a favorable price point, Belarusian tractors could become a key part of Pakistan’s agricultural future. The coming years will determine whether these new entrants can disrupt a market that has been dominated by local players for decades or whether the old guard will remain firmly in control.
