ICRA projects wholesale volume of tractors to rise 15-17% in FY26
Credit rating agency ICRA in its latest report has projected that wholesale volume of tractors to rise 15-17 per cent in the current financial year 2025-26 (FY26), sharply higher from its previous estimate of 8-10 per cent, on the back of supportive factors, including GST rate cut, which enhanced affordability for farmers. The revised forecast highlights a period of strong recovery and expansion for the tractor sector, driven by concrete policy support, favourable agricultural outcomes, and specific market dynamics related to regulatory changes.
According to the report, the upward revision is based on the industry's robust performance in recent months. Tractor wholesale volumes reported a strong growth of 30.1% year-on-year (YoY) in November 2025 and a cumulative growth of 19.2 per cent for the first eight months of FY26. It said one of the key drivers behind the improved outlook is the reduction of GST on tractors to 5 per cent, a policy change that has directly enhanced affordability for farmers. It noted that this reduction has translated into decrease in tractor prices, with savings of Rs 40,000 to Rs 1 lakh across different horsepower segments, making new tractors more accessible.
Moreover, the report said the overall adequate rainfall has supported crop sowing and yield expectations, contributing to healthier farm cash flows and positive rural sentiment. Another significant factor expected to influence sales in the coming quarters is the impending transition to the stricter tractor emission norms from April 1, 2026. With the new norms, ICRA anticipates a phase of pre-buying activity as customers and dealers look to acquire tractors under the current, familiar emission standards.
