Tractor makers stay optimistic despite deficient monsoon fears

Chennai: The tractor industry remains cautiously optimistic about demand in the current fiscal year after posting a record performance in FY26, despite concerns that a potentially deficient monsoon could dampen rural sentiment and farm incomes. The industry has projected single-digit growth for FY27.

Industry representatives, however, believe the sector is better positioned to withstand weather-related disruptions than in the past, supported by structural improvements in the agricultural ecosystem.

T R Kesavan, past president of the Tractor & Mechanization Association (TMA), said that while a deficient monsoon could have a short-term impact on farm sentiment, crop planning and liquidity in certain rain-fed regions, the impact on the tractor and farm mechanisation industry is unlikely to be uniform across the country. Indian agriculture has become more resilient due to expanding irrigation coverage, improved crop varieties and better reservoir management. “At this stage, the industry is not seeing any adverse impact,” he added.

Echoing this view, a top official at a leading tractor manufacturer said Indian agriculture has become significantly more resilient over the past decade. “We have had record food production this year, groundwater levels are sufficient, and sowing is higher than last year. Soil moisture is above the decade average and is supporting sowing activity. Rains are expected to improve in the second half, while MSP prices are also higher. We have not seen any fall in tractor demand so far, and I don’t see any reason for panic,” the official said.

Nevertheless, analysts caution that an El Niño event could weigh on industry performance in FY27. According to Pantomath Capital Advisors, the tractor industry could see a high-single-digit decline if rainfall remains below normal.

Narinder Mittal, president and MD of CNH India, said a below-normal monsoon could pressure tractor demand in FY27, particularly in rain-fed and irrigation-deficient regions where farm incomes remain closely tied to rainfall. Lower crop output and pressure on farmer affordability could moderate rural demand and tractor sales, especially in the latter part of the year.

The industry’s optimism is reflected in recent sales trends, supported by favorable farm sentiment, adequate reservoir levels, and sustained rural demand. During the first two months of FY27, market leader M&M reported a 22% rise in domestic tractor sales, while Escorts Kubota posted a 25% increase.