India Tractor Market Assessment, By Horsepower [Below 30 HP, 31-49 HP, 50-69 HP, Above 70 HP], By Drive Type [2-Wheel Drive, 4-Wheel Drive], By Industry [Agriculture, Construction, Mining, Others], By Region, Opportunities and Forecast, FY2019-FY2033F

India tractor market is projected to witness a CAGR of 5.97% during the forecast period FY2026-FY2033F, growing from USD 11.41 billion in FY2025 to USD 18.15 billion in FY2033F, propelled by the pivotal status of farm mechanization in raising productivity and efficiency. Agriculture is the leading sector, with tractors playing the key role of plowing, tilling, and harvesting in diverse farming conditions. The market is propelled by government schemes like subsidies and credit programs that make tractors affordable for small and marginal farmers. Moreover, the necessity of timely agricultural activities, particularly in monsoon-based areas, highlights the role of tractors in maintaining food security and yield.

Geographically, North India is at the forefront in the industry with its fertile land for agriculture and the construction sector, along with strong government backing. Uttar Pradesh, Punjab, and Haryana

are front-runners with wheat and sugarcane being their specialties. West and Central India, mainly Madhya Pradesh and Maharashtra, is also a major contributor due to huge fertile lands and rising adoption of tractors.

The major drivers are rising farm incomes in rural areas, adoption of high-horsepower tractors, and the utilization of cutting-edge technologies such as GPS and IoT-based farming solutions. With uncertain monsoons, the market is still on the rise with the help of innovation, sustainability, and themes coupled with an increased focus on precision farming. Competition in the market exists due to presence of multiple players. Established players such as Mahindra & Mahindra Limited, Tractors and Farm Equipment Limited, and Escorts Kubota Limited dominating the market and foreign players such as John Deere and New Holland dominating the high-end market. Emerging players such as Sonalika International Tractors Limited and Captain Tractors Pvt. Ltd are pushing low-cost and niche products, with large sales in the market, catering to the agriculture and construction industries.

For instance, in March 2024, Sonalika International Tractors Limited laid the foundation stone for two new plants in Hoshiarpur, Punjab. The company said it will invest USD 120 million in setting up a new tractor assembly plant.

New Launches Bolster the Demand for Tractors

New models of tractors are giving a boost to industry, fulfilling various agricultural needs and propelling consumption. Firms are launching new models with advanced technology, which includes more horsepower and improved fuel efficiency, fulfilling the needs of small and large farmers. Horticulture tractors are becoming popular, while high-HP tractors are meeting the demands of intensive agriculture. The new launches, along with concessional financing and government incentives, are reducing the cost of tractors for farmers. Offering needs-oriented solutions, thus pushing the market further while keeping the industry agitated and responsive to the Indian agricultural landscape. Manufacturers address challenges from changing agricultural demand and growing needs in agriculture, driving the market further, making the industry agitated, and responding to India's agricultural landscape.

For instance, in February 2025, Escorts Kubota Limited has introduced the new Farmtrac Promaxx range of tractors. Positioned in the 39-47 mid-horsepower segment, the new series of tractors is intended to cater to both agricultural and commercial requirements, including haulage. In another instance, in March 2023, Tractors and Farm Equipment Limited introduced the Massey Ferguson 8055 MAGNATRAK tractor in Karnataka with state-of-the-art technology and higher performance for new-generation farming requirements. The tractor was conceived to increase productivity and efficiency for varied agricultural operations.

Sustainability Drives Market Growth for Tractors in India

Sustainability is becoming a driver of growth for India's tractor market, fulfilling demands. As the world is turning greener, industries are coming up with green solutions such as electric tractors and CNG tractors that conserve carbon emissions and are cost-effective. Government policies on green energy and green agriculture also support this change. Further, precision farming technology like GPS tractors and IoT-based equipment reduces resource utilization and water and fertilizer loss. Considering climate change and resource shortages impacting farming, sustainability is not an option. Integrating sustainability into their product lines, the market for tractors is not merely taking care of the environment but driving future market expansion and stability as well.

For instance, in May 2024, Mahindra & Mahindra Limited, unveiled its first CBG (Compressed Bio-Gas) driven Yuvo Tech+ tractor, in the presence of Shri. Nitin Gadkari, Honourable Minister of Road Transport and Highways, Government of India at New Delhi. In another instance, in November 2023, Mahindra & Mahindra Limited launched its CNG-powered tractor at Agrovision Nagpur, highlighting a green agriculture solution. The tractor is designed to cut farmers' operational expenses while reducing carbon footprints. This move reflects Mahindra & Mahindra Limited values of eco-friendly technology and India's initiative towards clean energy for agriculture. The CNG tractor will increase fuel efficiency and serve as an alternative to diesel-powered tractors.

Agriculture Dominates the Tractor Market in India

Agriculture is the supporting sector of India's tractor industry. As most of the population is dependent on agriculture, tractors have become a necessity vehicle to promote greater productivity and efficiency. Tractors are being utilized on a large scale to plow, till, harvest, and haul crops over diverse agricultural landscapes. Government policies in the form of subsidies and credit facilities have made tractors within the reach of marginal and small farmers, propelling demand ahead. The necessity to ensure timely sowing and harvesting in monsoon-led areas proves their significance. Businesses are harvesting the growth opportunity in agriculture with the addition of new-generation tractors into the marketplace.

For instance, in February 2025, John Deere India Private Ltd launched a new series of tractors with a 130 HP model that help to boost the productivity and efficiency of agriculture. The new tractors come loaded with advanced features, improved fuel efficiency, and greater performance to meet the different requirements of agriculture. This launch enhances John Deere India Private Ltd portfolio as it offers farmers reliable and high-performance equipment to meet the modern challenges of farming and boost agricultural production.

North India Dominates the Regional Market Share

North India is the dominant region in India's tractor market, supported by the farm sector. Urbanization and industrialization in the productive plains of Uttar Pradesh, Punjab, and Haryana, constitute a major portion of the highly agricultural regions. Haryana and Punjab have huge numbers of farmers who rely on agriculture, and tractors became necessary farming machinery for sowing crops such as wheat and sugarcane. The government policies and subsidies, extensive dealership network and availability also increase the adoption of tractors.

For instance, in January 2025, Escorts Kubota Limited announced to spend USD 540 million on a new factory in Uttar Pradesh and earmarked another USD 48 million towards capital expenditure in FY2025-2026. The investment would go towards building stronger manufacturing capacities and catering to rising demand for farming and construction machinery. This strategy is consistent with the firm's efforts to extend its reach and consolidate its position in India.

Future Market Scenario (FY2026 - FY2033F)

Growing focus on sustainability and emission reduction will drive the adoption of electric tractors, supported by government incentives and advancements in battery technology.

Increased use of GPS, IoT, and AI-enabled tractors will enhance farm productivity, optimize resource use, and cater to the demand for data-driven agriculture.

Affordable rental and shared tractor services will gain traction, especially among small farmers, reducing ownership costs and improving accessibility.

Tractors will see expanded use in construction, forestry, and municipal applications, driven by infrastructure development and urbanization.

Key Players Landscape and Outlook

The Indian tractor market is a fiercely competitive arena, dominated by key players like Mahindra & Mahindra Limited, which holds the one of the largest market shares with its wide range of affordable and durable tractors. Tractors and Farm Equipment Limited and Escorts Kubota Limited are strong contenders, offering advanced and reliable models. International giants like John Deere India Private Limited and New Holland (CNH) cater to the premium segment with high-performance tractors. Emerging brands, such as Sonalika and Captain Tractors, are gaining ground with cost-effective and specialized solutions. Companies are innovating with electric tractors, precision farming technologies, and higher horsepower models to stay ahead. Aggressive marketing, financing schemes, and robust after-sales services further intensify the competition. This dynamic landscape drives continuous improvement, offering farmers better choices and fueling the industry's growth.

For instance, in September 2024, Mahindra & Mahindra Limited showcased its innovative CBG (Compressed Biogas)-powered tractor technology in New Delhi, highlighting its commitment to sustainable farming solutions. The demonstration emphasized the potential of CBG as an eco-friendly alternative fuel, reducing carbon emissions and promoting cleaner energy in agriculture. This initiative aligns with Mahindra's vision of driving green innovation and supporting India's transition toward renewable energy in the farming sector.