Favorable Monsoon Fuels Steady Growth in Indian Tractor Sales

Tractor sales in India are poised for moderate growth ranging between 4-7% in the fiscal year 2025-26, largely driven by a promising monsoon forecast. The favorable weather conditions are anticipated to bolster agricultural production, according to a report by ratings agency ICRA released on Wednesday.

Pre-buying activity, in anticipation of the TREM V emission norms set to be implemented on April 1, 2026, is also expected to contribute to the increase in sales volumes, the agency stated. In the previous fiscal year, the industry witnessed a 7% growth in wholesale volumes, fueled by consistent demand amidst satisfactory rainfall.

The India Meteorological Department has forecasted an above-normal monsoon at 105% of the long-period average, which should enhance crop yields and support the tractor industry volumes. Both kharif and rabi crop production showed year-over-year increases, indicating optimistic prospects for farm income. However, rising commodity costs due to tariffs on steel imports may pose a challenge, although the financial health of tractor manufacturers remains robust with low debt levels and sufficient cash reserves.

(With inputs from agencies.)