Tractor industry starts 2026 strong; domestic sales jump 43% in Jan

Chennai: The tractor industry kicked off the fourth quarter of FY26 and calendar year 2026 on a strong note, with domestic sales posting growth both year-on-year and month-on-month in Jan. Production and domestic sales hit their highest-ever levels for any Jan in the past decade, underscoring robust demand. Exports, however, showed a mixed trend—rising year-on-year but easing compared with the previous month. Total domestic tractor sales stood at 88,522 units in Jan this year, compared with 61,923 units a year ago, marking a 43% year-on-year increase. Sales also grew 27% compared with 69,890 units in Dec 2025, according to data from the Tractor & Mechanization Association (TMA).
"Domestic volumes, which account for about 90% of total sales, sustained the strong momentum seen since August 2025 following GST rationalisation that lowered acquisition costs and supported replacement demand. The performance was further aided by improved rural liquidity, driven by higher MSP realisations and better farm cash flows. Growth remained broad-based, with the 40HP –50HP segment leading expansion, reflecting a rising preference for higher-productivity tractors across commercial and multi-utility applications," said Poonam Upadhyay, director, Crisil Ratings. Maharashtra was among the key drivers of tractor demand following the introduction of the SMAM tractor subsidy. Benefits from the GST cut, a normal monsoon, and favourable terms of trade for farmers also contributed to the growth, according to Kotak Institutional Equities. Mumbai-headquartered tractor major Mahindra & Mahindra reported a 46% rise in domestic sales at 38,484 units in Jan this year, compared with 26,305 units in Jan 2025. Escorts Kubota reported a sharp 51% increase in domestic tractor sales at 9,137 units, up from 6,058 units a year earlier.Total tractor production crossed the 1 lakh mark after a month's gap, having remained above that level during June–Nov 2025. In January this year, total production stood at 106,168 units.Tractor exports in Jan stood at 9,202 units, up from 7,845 units in January 2025 but lower than 9,815 units in December 2025.