India's Tractor Market Grows 28% in August 2025, GST Cut to Boost Festive Demand

Key Highlights

• August 2025 tractor sales up 28% YoY.

• Mahindra sold 26,201 units, up 28%.

• Escorts Kubota domestic sales up 26.6%.

• GST cut from 12% to 5% to boost demand.

• Exports up 3.2%, festive season expected strong.

India’s domestic tractor market recorded strong growth in August 2025, supported by positive rural sentiment, good monsoon distribution, and a favorable policy push. The industry expects further momentum during the upcoming festive season, helped by the GST cut to 5%.

Also Read: Domestic Tractor Sales Rise to 64,297 Units in August 2025, Marking 28.25% YoY Growth

Tractor Market Growth in August 2025

According to the Tractor and Mechanization Association (TMA), domestic tractor sales in August 2025 stood at 64,322 units, a 28% rise from 50,134 units in August 2024. However, sales remained flat compared to July 2025, showing a brief pause before festive demand.
Export volumes touched 8,877 units, up 3.2% from July’s 8,599 units.

Mahindra & Mahindra Maintains Leadership

Mahindra & Mahindra Ltd.’s Farm Equipment Business (FEB) continued as the market leader with 26,201 tractors sold in August 2025, marking a 28% year-on-year rise. Compared to July’s 26,990 units, sales dipped slightly.

Including exports, Mahindra’s total sales reached 28,117 units, a sharp 28% growth from 21,917 units last year. Export volumes contributed 1,916 units, reflecting a 37% increase year-on-year.

Also Read: Mahindra Tractor Sales August 2025: 28% Growth in Domestic Sales, 37% Rise in Exports

Veejay Nakra, President of Mahindra’s Farm Equipment Business, said that the above-normal monsoon and strong reservoir levels are promising for both Kharif and Rabi crops. However, he warned that the IMD forecast of surplus September rainfall could affect Kharif harvests in some regions.

Escorts Kubota Reports Strong Sales

Escorts Kubota Ltd. also saw strong demand, selling 7,902 tractors in the domestic market in August 2025, up 26.6% from the previous year. Exports surged 35.5% to 554 units.

The company credited widespread rainfall, healthy reservoir levels, and early festive demand for its performance. It also highlighted that Kharif sowing has already crossed last year’s acreage, adding further optimism.

Also Read: Escorts Kubota Tractor Sales August 2025: 8,456 Tractors Sold, 27% Sales Growth Recorded

GST Cut Brings Relief to Farmers

In a major policy move, the GST Council reduced the tax rate on tractors and farm machinery from 12% to 5% with immediate effect. This 7% reduction is expected to make tractors cheaper and increase rural mechanization.

However, road tractors used for pulling semi-trailers with engine capacity above 1,800 cc will now be taxed at 18%, down from 28%.

Also Read: GST Reform 2025: Tractors and Agri Machinery GST Slashed to 5%

Bharat Madan, Whole-Time Director and CFO at Escorts Kubota, said the GST cut will bring savings of ₹40,000–₹60,000 per tractor, making them more affordable for farmers. While he noted temporary disruptions such as delayed purchases and dealer challenges, he emphasized that the long-term benefits would include higher demand, better mechanization, and improved rural incomes.

Industry Outlook for FY26

Industry experts remain positive about future growth. According to an ICRA report, India’s tractor industry is projected to grow by 4–7% in FY26, driven by good rainfall distribution and strong farm sentiment.

Although overall retail sales in FY25 declined slightly by 1%, recent months have shown signs of recovery, with July 2025 wholesale volumes rising 8% year-on-year.

The combination of government support, farmer financing schemes, favorable weather, and lower tractor prices due to GST reduction is expected to fuel strong festive demand and boost growth in the months ahead.

Also Read: CNH Unveils Made-in-India Compact Tractor, Aims to Double Market Share

CMV360 Says

India’s tractor industry is set for strong growth with August 2025 showing 28% YoY rise. The GST cut to 5% will make tractors cheaper, boosting demand during the festive season. With good monsoon distribution, healthy reservoir levels, and government support, both domestic and export sales are expected to remain robust in the coming months.