It was a double delight for the Indian tractor industry in 2025. For the first time, domestic tractor sales in a calendar year, in 2025 crossed the one million mark and exports crossed one lakh.
In 2025, domestic tractor salw as 10.90 lakh (1.09 million) units as against 9.10 lakh units in 2024. The domestic sales were up by 20 per cent over the previous year, according to Tractor Manufacturers Association data.
The increase in sales in 2025 was mainly attributed to conducive weather conditions, lower GST rates and a strong Kharif output, according to industry sources.
Similarly, exports crossed the one lakh mark to 1,05,006 units in 2025 as against 97,745 units in 2024. It was up by 7 per cent in 2025, says the data.
In December 2025, the domestic sale was up by 35 per cent to 69,890 as against 50,993 in December 2024. Similarly, exports were up by 22 per cent to 9,815 as against 8,074 in December 2024.
Strong performance
Escorts Kubota in a recent business update said that the domestic tractor industry sustained its strong performance in December, propelled by supportive government policies, lower GST rates, and continued state subsidies that enhanced affordability for farmers.
Industry benefited from a strong kharif output, enhanced rabi sowing as compared to last year, increased water availability, and positive rural sentiment, all of which contributed to heightened retail demand. With these encouraging factors in place, the industry is poised to sustain its growth momentum in the upcoming months, the company said.
Veejay Nakra, President – Farm Equipment Business, Mahindra & Mahindra Ltd, in the business update for December said cash flow availability in the market has improved supported by favourable crop yields following the Kharif harvest. Additionally, conducive weather conditions and healthy reservoir levels have contributed to increase in Rabi sowing acreage, which is expected to sustain tractor demand in the coming months.
After an exceptionally strong festive-led surge in September and October, a seasonal slow down comes when every year industry witnesses a natural period of demand normalisation, said Narinder Mittal, President & Managing Director, CNH India, manufacturers of tractors.
November-December typically marks the post-harvest phase, when farmers take a short pause to realign purchases with cash flows and rabi season requirements. This is not a sign of structural weakness; rather, it reflects timing shifts following advanced festive buying and the completion of peak agricultural activity.
This year has seen impressive growth due to supportive policy measures, including the reduction in GST on tractors, State-level subsidy support in key markets have improved affordability and encouraged faster purchase decisions, further aiding demand during the year. With healthy monsoon-supported output, stable commodity prices and steady government investment in rural infrastructure, we remain confident in the medium-term strength of the tractor industry and the broader farm mechanisation cycle, he told businessline.
Poonam Upadhyay, Director – Crisil Ratings, said the CY2025 tractor volume growth is a clear upside surprise. Domestic volumes surpassed 1.09 million units, up ~20 per cent year-over-year (y-o-y), indicating a broad-based rural recovery rather than a one-off festive spike. The combination of favourable monsoons, a strong Kharif harvest and structurally lower GST, alongside higher MSPs, has directly improved farm cash flows and affordability, pulling forward replacement demand and normalizing deferred purchases from the prior year. December’s sharp 35 per cent y-o-y domestic growth reinforces that demand momentum exited the year on a strong footing.
Exports, while relatively moderate at 7 per cent growth in CY2025, remained directionally positive and crossed the one-lakh mark for the first time. This reflects steady traction in Africa and Latin America, partly offset by softer ordering from select developed markets. The sharp pickup in exports, up 22 per cent in December following a 33 per cent rise in November, signals near-term order replenishment, although sustainability will need to be monitored. This year, exports were largely a volume stabilizer rather than a growth driver.
Looking ahead, the sector enters CY2026 with favourable tailwinds but a materially higher base. Near-term momentum should sustain, supported by healthy reservoir levels, improved rural cash flows from higher MSP realisations and continued affordability support from GST rationalisation. However, growth is likely to normalise to low-to-mid single digits as the replacement cycle matures and base effects set in. Export growth should see a modest improvement, contingent on currency stability and incremental market diversification. The tractor cycle has clearly turned up; the focus now shifts to sustaining volumes, improving product mix and protecting margins, she said.
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Published on January 9, 2026
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