Country roads seen taking tractors to one million milestone

New Delhi: Tractor sales, a barometer of economic activity in India’s rural markets, are expected to touch record levels in this financial year on the back of a favourable southwest monsoon, higher minimum support prices for key crops and increased government spending on development programmes in the country’s villages, company executives said.

The industry estimates FY26 sales will cross the 1 million mark for the first time, beating the record 945,311 units sold in FY23. That’s against 867,597 units sold in FY24 and 939,713 units in FY25.

“We are seeing many positive enablers aiding this growth, with the forecast of a normal southwest monsoon being one of them,” said Veejay Nakra, president, farm equipment business, Mahindra & Mahindra (M&M), which leads the tractor market with a 43.3% share.

Among other factors, healthy reservoir levels and a strong rabi crop are expected to bolster sentiment among buyers, spurring sales in rural areas.

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Reasons Behind Recovery

“After good monsoons last year, the market started recovering,” said Bharat Madan, whole-time director at Escorts Kubota. “In the March quarter, we saw double-digit growth. The monsoon prediction is quite good, for the second year in a row.”

The India Meteorological Department has forecast an above-normal June-September monsoon.

The decline in interest rates is also expected to push sales. The central bank has already cut the benchmark rate twice this year by a total of 50 basis points. India’s GDP is projected to grow 6.5% in FY26.

“FY26 can be a record year,” said Madan. “This year we are expecting (domestic sales) to be more than 1 million units.”

The latest data show FY26 tractor sales started on a positive note, up 8% to 83,000 units in April from the year earlier.

As per Central Water Commission (CWC) data, the country’s major 161 reservoirs currently have 57.974 billion cubic metres of live storage, which is 117.6% of last year’s levels and 115.9% of the normal level.

“The tractor industry in India is being driven by robust rural demand, favorable monsoon patterns, and increased government support for agriculture. Key growth parameters remain positive,” said Sandeep Sinha, CEO, TAFE (Tractors and Farm Equipment Limited).

“As a result, we anticipate industry growth of 5-10% in the first quarter of FY26. This momentum underscores the sector’s resilience and its critical role in supporting India’s agrarian economy. Industry post the first quarter will largely depend upon timeliness and spread of monsoon,” added Sinha

Other factors are also set to drive tractor sales.

“In addition to a shortage, manual labour is expensive and not as productive,” a senior industry executive said. “Mechanisation allows farmers to operate even in the dark with portable lights, increasing efficiency. This is also resulting in an increase in acceptance of farm machinery within the agri community.”

Overall, farm mechanisation penetration led by tractors in India stands at 45%, compared with 48% in China and more than 95% in Europe and North America.

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