Escorts Ltd. will exit its more than a decade-old tractor assembly operations in the U.S. as the global economic slowdown has stifled demand for agricultural machinery in the world's biggest economy, a senior executive at the Indian company said Tuesday.

Escorts plans to appoint distributors for its tractors in the U.S. instead of assembling them there, Joint Managing Director Nikhil Nanda told Dow Jones Newswires in an interview.

The distributors in the U.S. will sell the completely built tractors, which will be exported from Escorts' factory at Faridabad in the northern Indian state of Haryana.

"We have decided to exit the model (assembly of tractors)," Mr. Nanda said. "The model is inefficient, secondly, there are too many risks involved with currency fluctuations and the kind of payout to the dealers."

The rupee soared 13% against the U.S. dollar in the fiscal year ended March 31, hurting exporters. While the subprime mortgage meltdown in 2008 caused a turbulent phase in the U.S. economy, leading to a decline in demand for many products, including automobiles and tractors.

The unit of Escorts, Farmtrac North America LLC, started assembling tractors at its North Carolina factory in 1998. The factory has a capacity to make about 500 tractors a month and at the peak of operations, it sold 2,500 tractors a year in the North American market.

But Escorts suspended assembly operations in early 2009 after the financial meltdown.

Escorts assembly operations in the U.S. have remained suspended since then and it now plans to convert the unit to distribution from assembly, Mr. Nanda said.

Mr. Nanda said the company has enough capacity in India to meet global demand.

"Escorts is very strong in the domestic market with nearly 98% of tractor sales coming from India. We have enough capability in India to supply for our global operations," Mr. Nanda said.

The company expects to export 3,400 tractors in its current fiscal year that began October 1, 2009, up from 2,300 units a year earlier. The company exports tractors to 41 countries including those in Africa and Europe.

Mr. Nanda said the company aims to double its profit and revenue by fiscal 2011-12 as demand for farm equipment are expected to remain robust in India.

The company posted a net profit of 897.3 million rupees ($20.2 million) and revenue of 21.88 billion rupees in the previous fiscal year that ended September 2009. Profit in the three-month period ended March 31 soared more than five times to 414.7 million rupees.

"Tractor sales rose 42% in the second half of last year even though monsoons were delayed. The demand has been strong and is expected to rise further," Mr. Nanda said.

In India, about 400,000 tractors were sold in the year to March 31. Of this, sales of Escorts stood at 62,000 units, Mr. Nanda added.