India Overtakes the US and China in Tractor Sales
- 5 min read•
- 1,026•
- Last Updated: 06 Jan 2026 at 7:31 PM IST
Recently, India has outpaced the United States and China in terms of annual tractor sales volume. Domestic sales in the first 11 months of the 2025 calendar year crossed the one-million-unit mark. When compared to 2024 figures of 910,000 units, 2025 saw a 12% increase to cross 1.02 million units. Besides sales, the tractor production crossed 1.07 million units.
Why India’s Record Tractor Sales Go Beyond Agriculture?
Industry bodies such as the Tractor & Mechanisation Association (TMA) and Federation of Automobile Dealers Associations (FADA) report that tractor demand has been supported by strong rural sentiment, favourable monsoon conditions, improved reservoir levels, and supportive fiscal measures such as GST reductions from 12% to 5% on most tractor models and parts.
Other factors driving the demand:
Construction and Allied Applications
Agriculture remains the core source of demand. However, other industries where tractor demand is apparent include:
-
Construction & Infrastructure: Tractors are increasingly used for earthmoving, site preparation, and material transport. With India’s infrastructure push under schemes like PM Gati Shakti, demand from construction rose in 2025. Several industry reports highlight haulage and construction segments as key contributors to overall growth.
-
Transport: While many may not be familiar with this, tractors are cost-effective alternatives to trucks for short-distance goods movement, especially in rural and semi-urban areas. Strong demand for this vehicle category can be seen in mining belts, brick kilns, and sand transport, where tractors are preferred for rugged terrain.
-
Industrial & Utility Applications: Tractors are also used in logistics yards, warehouses, and small-scale industries for towing and material handling. They are also common in municipal corporations, which employ tractors for waste collection and road maintenance.
In September 2025, Mahindra & Mahindra stayed ahead with 64,946 units sold, a sharp 50.3% jump, while TAFE sold 27,530 units, growing 53.1%. Much of this momentum is directly linked to India’s massive ₹11 lakh crore infrastructure spending push.
Government Schemes and Rural Development
The allocation of ₹1.8 lakh crore for agriculture and rural development in the Union Budget 2025 is another key reason. This allocation supported the Prime Minister’s Dhan-Dhaanya Krishi Yojana, which targets crop diversification and mechanisation.
Over 40 million farmers received coverage under the Pradhan Mantri Fasal Bima Yojana and the Restructured Weather-Based Crop Insurance Scheme. This helped them cope with agriculture-related losses and use income towards mechanisation.
Access to credit has also become easier at the ground level. With Kisan Credit Card (KCC) coverage expanded to over 70 million accounts, more farmers can now finance machinery purchases. At the same time, ₹2.66 lakh crore was allocated for rural development, including rural roads and irrigation, which has pushed mechanisation deeper into villages, helping tractor sales grow.
Regional Hotspots of Tractor Demand in India
In the domestic market, North India, such as Punjab, Haryana, and Uttar Pradesh, is the largest demand hub. In FY25, Uttar Pradesh led growth with total sales of 1,39,886 units, accounting for 16.08% of national retail tractor sales.
North Indian states are noted for wheat and paddy cultivation, which drives demand for mechanisation.
Madhya Pradesh follows Uttar Pradesh, with the state recording sales of 1,15,784 units in FY25. Demand for tractors in Central India is driven by the cultivation of soybeans and pulses.
The third spot is held by Rajasthan, where total tractor sales stood at 1,12,240 units. This is followed by Maharashtra, which contributed 9.88%, or 85,970 units, to total national sales. In these Western Indian states, demand was driven by kharif sowing, irrigation schemes, and above-normal rainfall.
Uttar Pradesh | 1,39,886 | 16.08% |
Madhya Pradesh | 1,15,784 | 13.31% |
Rajasthan | 1,12,240 | 12.90% |
Maharashtra | 85,970 | 9.88% |
Gujarat | 83,962 | 9.65% |
Karnataka | 54,109 | 6.22% |
Chhattisgarh | 44,072 | 5.07% |
Haryana | 43,936 | 5.05% |
Bihar | 34,469 | 3.96% |
Punjab | 30,671 | 3.53% |
Other States | 1,24,775 | 14.34% |
Total | 8,69,874 | 100% |
Note: The above data does not include Lakshadweep, and a variance of 0.5–1% is possible.
Tractor Industry Sales & Market Share Comparison
Here is a quick analysis of how different manufacturers have performed over the years.
1 | Mahindra | 2,08,085 | 2,04,692 | 23.92% | 23.22% | +0.70% |
2 | Swaraj | 1,65,539 | 1,59,878 | 19.03% | 18.14% | +0.89% |
3 | Sonalika | 1,15,193 | 1,14,226 | 13.24% | 12.96% | +0.28% |
4 | Massey Ferguson | 99,286 | 1,08,103 | 11.41% | 12.26% | −0.85% |
5 | Escorts Kubota | 87,624 | 89,834 | 10.07% | 10.19% | −0.12% |
6 | John Deere | 66,752 | 63,179 | 7.67% | 7.17% | +0.51% |
7 | Eicher | 57,213 | 59,532 | 6.58% | 6.75% | −0.18% |
8 | New Holland | 35,283 | 35,899 | 4.06% | 4.07% | −0.02% |
9 | Kubota | 15,026 | 17,686 | 1.73% | 2.01% | −0.28% |
10 | Captain | 3,557 | 5,038 | 0.41% | 0.57% | −0.16% |
- | Others | 16,316 | 23,424 | 1.88% | 2.66% | −0.78% |
FY 2024–25 shows market consolidation. Mahindra and Swaraj are the clear leaders because of steady volume growth. John Deere also gained share. Mid-sized and smaller brands lost ground, pointing to cautious rural demand and buyers preferring established players with wider service networks.
From an investment point of view, rising sales and market share gains mostly support positive share price sentiment for listed manufacturers. The reason is strong demand signals and competitive positioning. On the other hand, a decline in volumes or market share erosion can put clear pressure on stock valuations due to growth concerns and margin outlook risks.
Indian Agricultural Tractor Sales (Domestic vs Exports)
There is a major difference between domestic tractor sales and the number of units manufacturers have exported:
2019 | 723.5 | 80.5 | 804.0 |
2020 | 802.7 | 77.4 | 880.0 |
2021 | 903.7 | 124.9 | 1,028.6 |
2022 | 912.1 | 131.9 | 1,043.9 |
2023 | 915.5 | 96.2 | 1,011.7 |
Over the years, the Indian tractor market has shown steady long-term growth, led mainly by domestic demand. From 2019 to 2024, domestic sales grew at a consistent 5.7% CAGR. However, exports were more volatile but delivered faster growth at a nearly 6% CAGR, peaking in 2022 before correcting.
Horsepower Mix Shift: The Silent Margin Expansion Story
Horsepower shows how much work a tractor can do, including pulling loads, running implements, and handling tough farming tasks efficiently. Here is the bifurcation of tractor sales based on the same.
>51 | 104.5 | 205.1 |
41-50 HP | 361.8 | 836.3 |
31-40 HP | 257.3 | 392.9 |
21-30 HP | 482.0 | 99.4 |
<20 HP | 32.2 | 44.2 |
Total Market | 804.0 | 1577.9 |
The tractor market in India is changing gears. Farmers are moving away from smaller tractors to higher-horsepower models, especially in the 41–50 HP and above-51 HP range. This shift arises from large farm sizes, growing use of modern equipment, and better income support in rural regions. Given these figures, total tractor sales are expected to almost double by 2029, even as demand for lower HP tractors continues to ease.
Comparing India’s Tractor Market with the US and China
As per Mordor Intelligence research reports, the Indian agricultural tractor market is projected to grow at a CAGR of 6.7%, reaching USD 10.95 billion by 2030. In contrast, the US tractor market is projected to grow at a CAGR of 5.7% to USD 12.8 billion by 2030. In the US, growth is driven by large-scale mechanised farming but limited by market saturation.
Meanwhile, in China, the tractor industry was valued at USD 14.8 billion in 2025. It is forecast to reach USD 21.4 billion by 2030 at a CAGR of 7.7%.
Key Headwinds in the Tractor Industry
In India, the tractor industry faces several key challenges:
- In India, around 80% of the farms belong to small or marginal farmer categories. The result? Instead of owning tractors, farmers usually prefer rentals.
- Stricter emission and safety norms, such as TREM-V/TRM standards, raise manufacturing costs, which are passed on to buyers, reducing affordability.
- Poor rural connectivity and service networks hinder effective deployment and maintenance of machinery in remote regions.
- Regional crop fluctuations cause frequent price swings and uncertain earnings. This makes farmers cautious about adopting farm machinery.
Key Takeaways
Beyond headline volumes, readers and investors should note three underplayed drivers. First, replacement demand is rising, forming a significant portion of overall tractor volumes, as older tractors reach the end of their typical lifecycle. This steady turnover supports base demand even during weaker monsoon seasons.
Second, the horsepower mix is shifting toward 41–50 HP models, which offer higher margins and stronger non-farm utility, benefiting organised Original Equipment Manufacturers (OEMs) over regional players.
Third, exports remain an optional upside—India’s cost-competitive manufacturing positions it well for Africa and the Association of Southeast Asian Nations (ASEAN) as global farm mechanisation deepens. Investors should also monitor financing penetration and the health of rural Non-Banking Financial Companies (NBFCs), as easier credit directly converts latent demand into sales.
For stock market investors, one important angle is operating leverage. With industry volumes crossing the one-million-mark, fixed costs get spread better, lifting EBITDA margins even without aggressive price hikes. At the same time, consolidation benefits OEMs with in-house financing and strong spare-parts and service businesses, creating steady, recurring cash flows that can cushion earnings during weak monsoons or election years.
Sources:
IndoFarm
Tractor News
Autocar
ImpriIndia
Mordor
Mordor
AG TODAY
Mordor
Tractor Gyan
India Today
CNBC
TOI
CarraroIndia
PIB
DD news
