Tractor sales to grow 4-7 pc in FY26, signaling a positive trend for India’s agricultural vehicle market. Analysts also expect the 2-wheeler industry to record healthy growth, driven by rising demand, improved financing options, and favorable government policies. This dual-sector expansion reflects strong consumer confidence and robust economic activity in both rural and urban markets.
New Delhi : Analysts expect tractor sales to grow 4-7 per cent in FY2026, while the two-wheeler industry is likely to see healthy growth, according to a new report released on Tuesday.
Above-normal rainfall, strong rural incomes, festive demand, and recent GST rate cuts are boosting affordability and driving sales, the data from rating agency ICRA shows.
The tractor industry has already delivered strong performance in FY2026. Wholesale volumes rose 28.2 per cent year-on-year (YoY) in August 2025, while cumulative growth for the first five months of the fiscal reached 11.7 per cent.
Retail sales in August jumped 30.1 per cent compared to the same month last year, reflecting positive farmer sentiment and good rainfall.
India received 108 per cent of the long-period average rainfall by September 17, which stimulated agricultural activity and rural demand.
ICRA noted that the recent cut in GST rates on tractors to 5 per cent will further lift demand during the upcoming festive season.
The industry is also preparing for possible pre-buying ahead of the TREM V emission norms, effective from April 1, 2026.
Tractor manufacturers are maintaining strong financial profiles, supported by steady demand, operating leverage, and stable raw material costs.
In the two-wheeler industry, wholesale volumes grew 7.2 per cent YoY in August to 1.8 million units, as companies accelerated dispatches ahead of the festive season.
However, retail sales rose only 2.2 per cent in August due to excess rainfall in some regions and customers delaying purchases in anticipation of GST benefits. Analysts expect stronger demand during the festive season.
Exports also strengthened the segment, with overseas shipments increasing 27.5 per cent in August compared to last year.
Electric two-wheeler sales continued to grow steadily, reaching 1,04,725 units in August, a 1.8 per cent rise from the previous month. EV penetration in the two-wheeler category remained stable at around 6-7 per cent, ICRA added.
Looking ahead, ICRA expects domestic two-wheeler volumes to grow 6-9 per cent in FY2026. The agency cited replacement demand, urban market recovery, healthy rural incomes due to good monsoon rainfall, and the GST rate cut as key drivers.
–IANS
