Wholesale volumes rose by 20.1% YoY, while retail volumes increased by 28.3% YoY in July 2026, aided by a low base effect, steady farm cash flows and improved affordability following the GST rate cut. Even as volumes have grown by 19% on YoY basis in April-July FY2027, it is expected to moderate over the remainder of FY2027 owing to the high base of FY2026, and relatively weak monsoon outlook, which could adversely affect farm incomes. 

EXHIBIT : YoY change in tractor volumes sold in FY2026 and 4M FY2027

Source: VAHAN – Ministry of Road Transport & Highways; ICRA Research; SMAM provides 50-80% subsidies to farmers for purchasing agricultural machinery, including tractors, to increase farm power for small and marginal landholders.