Tractor Sales, Production Cross One Million in 11 Months, What’s Fueling the Booming Tractor Market?

For the first time in India’s history, the tractor industry has achieved record-breaking production and sales within a limited time frame. With December still to go, tractor production and sales between January and November have already crossed the historic one-million-unit mark in just 11 months.

Total domestic tractor sales during January–November 2025 stood at 1.02 million units, up from 0.91 million units in the same period last year. Tractor production also crossed the one-million mark, reaching 1.07 million units. Overall, the tractor market has recorded a robust growth of around 12 percent during these 11 months. Mahindra & Mahindra once again led the market, posting a 19 percent rise in domestic tractor sales, with nearly 0.44 million units sold during the period.

According to data released by the Tractor and Mechanization Association (TMA), total tractor production in January 2025 was 92,648 units, while combined domestic and export sales stood at 69,770 units. By June, production had risen to 1,04,329 units and sales to 1,21,613 units. The momentum strengthened further by September, when production crossed 1,14,500 units and sales exceeded 1,54,417 units. In November, production and sales stood at 1,02,915 units and 1,02,011 units, respectively. As a result, both production and sales hit record levels even before the start of December.

TMA data shows that domestic tractor sales touched 1.02 million units during January–November 2025, compared with 0.91 million units in the same period of 2024. Crisil Ratings has welcomed this trend. In an interview with a newspaper, Crisil Director Poona Upadhyay described crossing the one-million-unit mark by November as a strong signal, adding that if the current pace continues, calendar year 2025 could close at a record high in terms of tractor sales.

What Is Driving the Tractor Market Boom

Industry experts see this surge as a clear reflection of improving agricultural and rural economic conditions. Strong demand for tractors has pushed up production, supported by a good Kharif season and a favourable monsoon. Adequate rainfall ensured healthy reservoir levels, while higher crop procurement prices and increased MSPs improved farm incomes, leaving farmers with greater purchasing power.

Another key trigger was the implementation of GST 2.0 by the Modi government on September 22, 2025. Under the revised structure, GST on tractors with engines below 1,800 cc was reduced from 12 percent to 5 percent. Taxes on several tractor parts and components were also cut, making entry-level and mid-segment tractors more affordable. This encouraged rural buyers and farmers to advance their purchases, leading to a sharp rise in demand.

Apart from agriculture, the revival of the construction sector has also played a significant role. Construction activities account for nearly 30–35 percent of tractor demand. A pickup in construction during the fourth quarter of 2025 further boosted tractor sales.

Looking ahead, market participants are closely watching December and the outlook for 2026. Media reports quoting Crisil have indicated that the TREM-V emission norms are expected to come into force from April 1, 2026. This could trigger pre-buying towards the end of the financial year, as buyers rush to purchase tractors before the new emission standards are implemented.