Under the agreement Mahindra, the world’s number four tractor maker, will supply tractors through ITMCo’s channels and eventually develop tractors to suit local conditions, the company said in a statement.
Officials at Mahindra declined to give financial details about the agreement.
“Iran is a focus market in our strategy to put Mahindra tractors in farms across the world,” the company said.
Shares in the company ended down 1.4 percent at 686.50 rupees in a weak Mumbai market.
Mahindra aims to emerge as the world’s number-one tractor maker in the next five years.
Iran’s ITMCo makes trucks, tractors and industrial tools.
Mahindra also has a joint venture in China with local truck maker Jiangling Motors Co. with an annual capacity of 12,000 tractors.
