Tractors Sales Growth: Farmers will get ‘good news’ this year, tractors will be cheaper due to GST reduction; Estimated 17% growth in sales

• ICRA estimate of benefits due to GST reduction
• Tractor sales likely to increase by 17% in 2026
• Farmers will get relief due to policy support

Tractor Sales Growth: Rating agency ICRA on Friday estimated that tractor wholesale sales will grow by 15-17 per cent in the current financial year due to various factors including GST cuts. Earlier, he had predicted an 8 to 10 percent growth in tractor wholesale sales. The revision in estimates comes on the back of strong industry performance in recent months. Tractor wholesales grew by 30.1 percent year-on-year in November, while overall growth was 19.2 percent in the April-November period. According to the rating agency, the revised forecast is due to the combined effect of fiscal and regulatory support, which has strengthened demand fundamentals.

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This revised forecast indicates a period of rapid recovery and expansion in the tractor industry, which is a result of strong policy support, favorable agricultural results and market conditions related to regulatory changes. ICRA said the reduction of GST on tractors to 5 percent was the main reason behind the increase in demand. This policy change has directly reduced tractor prices, making it easier for farmers to buy. This reduction in tractor prices across different horsepower ranges will save farmers between Rs 40,000 and Rs 100,000, making new tractors more affordable.

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Adequate rains have supported crop sowing and yield prospects, the rating agency said. This has improved the income of farmers and created a positive atmosphere in rural areas. ICRA expects an increase in pre-purchase activities with the new regulations. As tractors are now affordable to farmers due to reduction in GST, India’s agriculture sector will grow as well as the creation of tractor manufacturing companies will boost India’s economy.

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