New Delhi – India’s domestic tractor sales are poised to reach an all-time high of 9.75 lakh units in fiscal 2026, marking a 3–5% year-on-year increase, according to a report released Monday by CRISIL Ratings. The surge will be driven by favorable monsoon forecasts, higher minimum support prices (MSPs), increased construction demand, and anticipated pre-buying ahead of new emission regulations.
Tractor sales are expected to surpass the previous record of 9.45 lakh units set in fiscal 2023, building on a solid 7% growth achieved in fiscal 2025. This sustained momentum mirrors the back-to-back volume increases seen during fiscal 2019.
Anuj Sethi, Senior Director at CRISIL Ratings, attributed the optimistic outlook to a combination of agricultural and infrastructure drivers. “An above-normal monsoon, expected MSP hikes for key cash crops, and increased road construction supported by a generous Union Budget allocation will collectively drive rural confidence and farm investments, especially in tractors,” he said.
The Indian Meteorological Department’s forecast of above-normal rainfall is expected to further uplift rural sentiment and catalyze tractor purchases. Additionally, pre-buying ahead of the implementation of TREM V emission norms, slated for April 1, 2026, could bolster sales in the latter part of the fiscal year.
CRISIL highlighted that the impending price hikes due to stricter emission standards could prompt farmers and contractors to advance purchases, giving a strong push to late-year sales.
Despite regulatory changes, manufacturers are expected to maintain a stable operating margin of 13.0–13.5% in fiscal 2026, aided by rising sales volumes and easing input costs. This mirrors margin performance from the past two years.
According to Poonam Upadhyay, Director at CRISIL Ratings, the industry enters FY26 on solid financial footing. “Tractor makers are benefitting from strong cash flow, low leverage, and healthy liquidity, which positions them well for capacity expansion and investments in emission control technologies,” she said.
A CRISIL analysis of five leading tractor original equipment manufacturers (OEMs), collectively responsible for over 90% of industry volumes, found that agricultural demand accounts for 70–75% of tractor sales, with construction and related sectors comprising the remainder.
As policy support and weather conditions align, India’s tractor industry appears well-placed to accelerate its growth trajectory in the year ahead.