India’s Tractor Sales Projected to Reach Record 9.75 Lakh Units by FY26
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Synopsis
According to a Crisil report, tractor sales in India are projected to reach an all-time high of 9.75 lakh units in fiscal 2026, reflecting a year-on-year increase of 3-5%. This growth is expected to be driven by favorable monsoon conditions, increased minimum support prices, and rising construction demand.
Key Takeaways
- Tractor sales to hit 9.75 lakh units in FY26.
- 3-5% year-on-year growth expected.
- Above-normal monsoon forecast aiding sales.
- Higher MSPs for cash crops boosting farmer confidence.
- Pre-buying likely due to TREM V emission norms.
New Delhi, April 21 (NationPress) The domestic tractor sales are projected to reach a record 9.75 lakh units in the fiscal year 2026, marking a 3-5 percent increase compared to the previous year, according to a report by Crisil released on Monday.
This surge is anticipated to be fueled by a forecast of an above-normal monsoon, higher minimum support prices (MSPs) for essential cash crops, and increased demands for replacement and construction.
Additionally, the impending introduction of the TREM V emission standards, set to take effect on April 1, 2026, may lead to a pre-buying trend as the fiscal year concludes, further boosting sales.
Consequently, tractor sales are expected to exceed the previous peak of 9.45 lakh units recorded in fiscal 2023, continuing the positive growth trend observed since fiscal 2019.
The report noted a robust 7 percent growth in tractor sales for fiscal 2025.
The Indian Meteorological Department’s prediction of a favorable monsoon is expected to enhance rural morale and strengthen farmer confidence, which is vital for promoting agricultural investments like tractors.
“The anticipated rise in MSPs for critical cash crops, coupled with a rebound in construction activities—particularly in road development—backed by significant government funding in the Union Budget for this fiscal year, should facilitate a 3-5 percent increase in tractor sales,” stated Anuj Sethi, Senior Director at Crisil Ratings.
Moreover, potential price increases driven by TREM V regulations from April 2026 could incite pre-buying in the final quarter of the fiscal year, providing an additional sales boost, he mentioned.
Increasing sales volume and declining input costs are likely to maintain the operating margin for manufacturers in the range of 13.0-13.5 percent this fiscal year, consistent with the previous two fiscal periods.
With strong cash flow, minimal debt, and solid liquidity, tractor manufacturers are well-prepared to invest in capacity expansion and upgrade emissions control technologies.
A Crisil Ratings analysis covering five major tractor original equipment manufacturers (OEMs), which represent over 90 percent of industry volume, supports this outlook. The agriculture sector accounts for 70-75 percent of tractor sales, while construction and related sectors contribute the remainder.
Poonam Upadhyay, Director at Crisil Ratings, remarked that tractor manufacturers have commenced fiscal 2026 from a position of strength, with stable margins between 13-13.5 percent due to lower input costs and ongoing volume growth.
