Tractor wholesale volumes reported growth of around 19.2% in 8M FY2026. ICRA has revised its wholesale volume growth outlook for the tractor industry to 15-17% for FY2026, up from 8-10% earlier. The upward revision is driven by an improvement in demand post GST rate cuts (reflected in strong Oct-Nov volumes), an increase in farm cash flows, and pre-buying ahead of the upcoming emission norm transition (effective April 2026).

• Tractor demand remained strong in YTD FY2026: Tractor wholesale volumes grew by 19.2% YoY, while retail volumes increased by 17.8% YoY in 8M FY2026, driven by positive rural sentiment and the Goods and Services Tax (GST) rate cut from 12% to 5%, which reduced prices between Rs. 40,000 to Rs. 1,00,000 depending on the horsepower (HP) range. Pre-buying ahead of the TREM V emission norms, proposed to take effect from April 1, 2026, is also expected to aid volume growth.
• Favourable monsoon supports agricultural activities and industry volumes: India recorded 108% of the long-period average rainfall during the 2025 Southwest Monsoon, though the distribution was uneven. Aided by healthy precipitation, reservoir levels remain comfortably above last year’s levels as well as the decadal average.