India Tractor Sales Up 28% in August; GST Cut to Boost Demand

Tractor sales in India rising with 64,322 tractors sold in August 2025, a growth of 28% compared to the same period last year. The good monsoon rains, favourable rural sentiment and government support have enabled farmers to buy more farm tractors in India. Sales were quite similar to July, but experts expect tractor demand in India to grow during the festive season—particularly aided by the new GST rate of 5% on tractors.

Mahindra Still on Top

Mahindra tractors continue to lead the market. Mahindra & Mahindra sold 26,201 tractors in August, up 28% from last year. Including exports, the total sales were 28,117 units, with exports alone increasing by 37% to 1,916 tractors.

Veejay Nakra, President of Mahindra’s Farm Equipment Business, said, “Good monsoon rains and higher water levels in reservoirs are helping this year’s Kharif crops and will also support the Rabi season.” He also warned that extra rainfall in September might affect some regions, so farmers need to be careful.

Other Companies Growing Too

Escorts Kubota tractors also saw strong growth. The company sold 7,902 tractors in August, a 26.6% increase from last year. Exports went up 35.5% to 554 tractors. Escorts Kubota stated that good rains, full reservoirs, and early festive demand helped sales. Kharif sowing has already increased compared to last year, indicating positive trends in the tractor market in India.

New GST Rate Makes Tractors Cheaper

The tractor GST reduction has made tractors more affordable. The GST on most tractors is now 5%, while only large road tractors used for pulling semi-trailers with engines over 1,800 cc are taxed at 18% (down from 28%).

Bharat Madan, CFO at Escorts Kubota, stated, “The GST cut would save farmers ₹40,000-₹60,000 per tractor. There can be some delay or challenges for dealers in the short-term, but in the long-term, it will enable farmers to purchase more tractors, enhance farm productivity, and improve rural incomes.”

Looking Ahead

With good monsoon rains, a positive sentiment among farmers and the GST cut on tractors, demand in India is expected to rise in the coming months. The festive season may generate even higher sales. This is good news for farmers and positive for India’s agriculture sector and tractor market.

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