Making farm machines accessible and cost-effective

The GSR rate revision for farm machinery and equipment is being viewed as a welcome move by the government to the farming community. The manufacturers have also hailed the move with prices coming down, which is expected to bring down the price. It will take some time before the benefits reach the farmers.

- Sanjiv Das

The recent cut announced by the Finance Ministry, Government of India, is being hailed by the farm mechanisation sector. With rate cuts from 12 per cent to 5 per cent for tractors with engine capacity of less than 1800 cc, the tractor and its allied sector are looking ahead for robust sales in the days to come, with farmers purchasing it in a more affordable way. In the category of farm machinery for market size, the focus subcategory are tractors, as it is the majorly sold farm machinery. According to the Federation of Automobile Dealers Associations (FADA) estimates, the retail tractor sales in FY 2024-25 were ~883,095 units. This year (FY 2025-26) outlook monthly retail data through mid-2025 show strong momentum (e.g., August 2025 retail tractor sales jumped to ~85,215 units and some OEMs reported record months in September).

Post GST cut effective on September 22, a realistic near-term scenario predicts as follows: If higher monthly growth (post-GST) continues, FY25-26 tractor sales could recover above FY24-25 levels and possibly trend toward 9.0-10.0 lakh units (hypothetically), with upside if demand stays strong into the festive/post-harvest buying season. If demand reverts, growth will be muted.

Changes in offering

A 35 HP tractor will now be cheaper by Rs 41,000, followed by a 45 HP tractor being cheaper by Rs 45,000, a 50 HP tractor by Rs 53,000, and a 75 HP tractor being cheaper by Rs 63,000.