Domestic Tractor Shipments Soar 45% in September, Fueled by GST Cut, Festive Demand

India’s tractor industry posted a strong double-digit growth in September 2025, with total sales rising 43% year-on-year to 154,417 units, supported by festive-season buying and the recent Goods and Services Tax (GST) rate reduction on tractors and farm machinery.

According to data from the Tractor and Mechanization Association (TMA), domestic sales surged 45% to 146,180 units compared to 100,542 units in September 2024. Export volumes also rose 10% to 8,237 units from 7,488 units last year.

Month-on-month, the industry more than doubled its sales from August’s 73,199 units, signaling a strong pre-festive momentum ahead of Diwali.

The largest tractor manufacturer Mahindra & Mahindra Ltd.’s Farm Equipment Business (FEB) reported 50% year-on-year growth in domestic tractor sales, reaching 64,946 units compared to 43,201 units a year earlier. Total sales, including exports, rose to 66,111 units from 44,256 units, marking a 49% increase.

The company attributed the robust performance to the recent GST rate reduction and the advancement of the Navratri festival to September.

Veejay Nakra, President of the Farm Equipment Business at Mahindra & Mahindra Ltd., said, “The Prime Minister’s GST rate reduction decision drove increased purchases during the first nine days of Navratri. Favorable Kharif crop outlook, expanded cultivation area, and above-normal monsoon conditions also supported strong demand.”

Escorts Kubota Ltd. (EKL) reported its highest-ever monthly tractor sales, with the Agri Machinery Business Division selling 18,267 units in September 2025, up 47.6% from 12,380 units in the same month last year.

Domestic sales grew 48.5% to 17,803 units, while exports increased 17.5% to 464 units.

The company said the growth was driven by favorable rural conditions, improved water reservoir levels, and an early festive season. It added that the recent GST reduction further boosted market sentiment.

In a major policy move, the GST Council reduced the tax rate on tractors and farm machinery from 12% to 5%. Most tractors now fall under this lower bracket, while road tractors used for pulling semi-trailers with engine capacity above 1,800 cc are taxed at 18%, down from 28%.

Industry executives say the 7-percentage-point reduction could translate into savings of Rs 40,000–60,000 per tractor, making them more affordable for farmers and rural entrepreneurs.

With improved liquidity, strong crop prospects, and renewed government focus on mechanization, analysts expect tractor demand to stay strong through the festive season and into the rabi sowing period.