The tractor industry made a solid start to the year 2026 by registering a 45 per cent annual growth in sales in both domestic and exports in the month of January. According to Tractor and Mechanization Association data, while domestic sales increased by 28 percent, export sales increased by 17 percent.
Industry officials said domestic sales increased mainly due to reasons like GST cut, normal monsoon and exports were driven by good demand in Africa and Latin America.
Maharashtra was one of the key drivers of sales after the introduction of the Sub-Mission on Agricultural Mechanization (SMAM) tractor subsidy. Excluding Maharashtra, the tractor segment would have grown by more than 20 per cent year-on-year, benefiting from GST cut, normal monsoon and favorable trade conditions for farmers.
SMAM provides 50 percent to 80 percent subsidy to farmers to purchase agricultural machinery, including tractors, to increase farm power for small and marginal landholders.
Poonam Upadhyay, Director, CRISIL Ratings, says domestic tractor sales recorded strong growth in January 2026, adding to the strong momentum seen after GST rationalization, which reduced acquisition costs and supported replacement demand.
“Performance was helped by better rural liquidity due to higher MSP receipts and better farm cash flows. The 40-50 HP segment led the growth, reflecting the growing preference for higher productivity tractors in commercial and multi-utility applications,” he said.
He said exports grew by a healthy 17 per cent year-on-year, marking the third consecutive month of strong momentum, supported by channel restocking and gradual demand recovery along with improvement in order inflows and demand pick-up in key regions such as Africa, Latin America and some South East Asian markets.
According to Narinder Mittal, Chairman and Managing Director, CNH India, the January tractor data clearly indicates continued momentum for the industry, building on the growth path seen during the last quarter. The underlying fundamentals in rural markets remain strong, with overall sales and demand, including domestic, increasing year-on-year.
“The recent GST reduction is expected to further boost buying sentiment and we expect this positive trend to translate into higher volumes during the quarter,” he said. business Line.
Escorts Kubota Ltd said the domestic tractor industry showed sustained momentum in January 2026, driven by positive rural sentiment and increase in agricultural activity due to progress in Rabi sowing, improvement in water availability, reduction in GST rate, favorable government policies and ongoing state subsidies. These favorable conditions are expected to fuel continued growth in the industry in the coming months.
According to Vijay Nakra, president, farm equipment business, Mahindra & Mahindra Ltd, high reservoir levels have supported record growth in Rabi sowing. Expectations of government support and higher allocations in rural development in the Budget today should have a positive impact on agriculture and farm mechanization in the coming months.
Published on February 10, 2026
