ICRA sees tractor industry growth moderating in FY2027

India’s tractor industry is expected to witness a moderation in volume growth to 1-4 percent in FY2027 after a strong performance in the previous fiscal, as a high base and the possibility of below-normal monsoon rainfall weigh on demand, according to an ICRA sector report.

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The report said wholesale tractor volumes remained robust in May 2026, but cautioned that growth could soften in the current fiscal year. “Following a robust rise of 23.5% YoY in FY2026, wholesale volume growth is likely to soften to 1-4% in FY2027 owing to a high base effect and the IMD’s forecast of a below-normal monsoon,” ICRA said in its report.

The rating agency noted that wholesale tractor sales recorded strong growth in May.

“Wholesale volumes reported strong growth of 19.3% YoY in May 2026, driven by a low base effect and improved affordability following the GST reduction on tractors,” the report said.

According to ICRA, tractor demand remained healthy during the month, supported by farm incomes and lower ownership costs.