Tractor wholesale volumes reported growth of 22.8% in 11M FY2026, supported by above-normal monsoons, GST reduction on tractors and pre-buying (though now expected to ease due to TREM-V transition postponement). The volumes are estimated to reach an all-time high of 11.3-11.5 lakh units in FY2026. The wholesale volumes growth rate is expected to soften to 1-4% in FY2027 on a high base.
Tractor demand remained strong in 11M-FY2026: Tractor wholesale volumes grew by 22.8% YoY1, while retail volumes increased by 19.3% YoY in 11M 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 across the horsepower (HP) ranges. Additionally, pre-buying ahead of the TREM V emission norms—earlier scheduled for April 2026 but recently deferred—also boosted volumes.
otential El Niño poses downside risk to farm output and tractor demand: India recorded 108% of the long-period average rainfall in CY2025, keeping reservoir levels above last year and decadal average. However, rainfall in 2026 is expected to be weaker, particularly in the latter half due to potential El Niño, posing risks to farm output and tractor sales, thus remaining a monitorable.