Tractor industry volumes likely to grow 4-7% in FY26: ICRA

Tractor industry volumes are expected to grow in the range of 4-7 per cent in the current fiscal, backed by a favourable monsoon, rating agency Icra said on Monday.

Following a growth of 7 per cent in FY2025, tractor industry volumes are expected to report a growth of 4-7 per cent in FY26, supported by a favourable monsoon, it said in a statement.

Pre-buying ahead of the TREM V emission norms, proposed to take effect from April 1, 2026, could further aid volume growth, it added.


The tractor demand remained strong in July 2025, with wholesale and retail volumes rising by 8 per cent and 11 per cent year-on-year (YoY), respectively.

According to ICRA, a favourable monsoon is expected to further support agricultural activities and industry volumes.

The India Meteorological Department (IMD) has forecast above-normal precipitation at 106 per cent of the long-period average (LPA) during the current monsoons, as per its second long-range forecast.

Additionally, the third Advance Estimates for kharif and rabi crops for AY2024-25, released by the Ministry of Agriculture and Farmers Welfare (MA&FW) in May 2025, indicate a YoY increase of 7.9 per cent and 4.5 per cent, respectively, in foodgrain output.

This provides optimism regarding an improved agri-economy and demand for tractors, Icra said.