Tractor sales touch all-time high in October driven by GST cut and favourable monsoon
According to ICRA, the tractor original equipment manufacturers will maintain their strong credit profiles
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NAGARA GOPAL
Tractor sales in October touched the highest ever levels for any month in the last seven years driven by good monsoons and GST rate cut.
In October, 1,73,635 tractors were sold as against 1,51,772 in October 2024 and 1,54,417 in September 2025, according to data from Tractor and Mechanisation Association. The previous highest monthly tally was in September 2025 at 1,54,417 units.
“A good monsoon, combined with the benefit of GST rate cut announced in September have supported the strong performance in September & October 2025. Going forward, factors like timely onset of Rabi sowing & good progress in Kharif harvesting augur well for tractor sales,” Veejay Nakra, President, Farm Equipment Business, Mahindra & Mahindra Ltd, said recently.
Traditional cyclical segments such as earth moving equipment and agricultural tractors also saw month-on-month gains in October, highlighting the spillover from infrastructure and rural activity, according to the Shriram Mobility Bulletin .
According to Poonam Upadhyay, Director, Crisil Ratings, tractor sales surged 14 per cent month-on-month in October 2025, driven by festive demand, robust kharif cash flows, and pre-rabi buying sentiment.
“The GST 2.0 rationalisation has improved affordability, with tractors up to 1800 cc now attracting a 5 per cent GST rate, down from 12 per cent, and on parts reduced from 18 per cent to 5 per cent. This has prompted advance purchases, but demand is expected to normalise after the rabi season. Additionally, impending emission norms, potentially effective from early 2026, may trigger pre-buying in the near term, before demand stabilises,” Upadhyay said.
Meanwhile, credit rating firm ICRA significantly revised upward its growth outlook for the Indian tractor industry for fiscal year 2026. The new forecast of 8-10 per cent wholesale volume growth represents a substantial increase from the previous estimate of 4-7 per cent, driven primarily by above-normal monsoon rainfall and the recent reduction in the GST.
According to ICRA, the tractor original equipment manufacturers will maintain their strong credit profiles. Profit margins are likely to remain healthy, aided by the expected rise in volumes, benefits from operating leverage, and stable raw material costs. The industry’s financial strength is further underpinned by low debt levels and sufficient cash and liquid investments
Published on November 10, 2025
