Mumbai: The tractor industrys volume growth is likely to moderate to 1-4% in current fiscal due to a high base effect and a forecast of a below-normal monsoon, after growing at 23.5% year-on-year in FY26, ratings agency Icra said. The Indian Meteorological Department’s first-stage long-range forecast (LRF) for 2026 Southwest Monsoon projects below-normal rainfall due to the expected El Nino conditions, agency said.
Recent IMD rainfall data (from June 2026) also points to precipitation deficits across parts of central, southern and coastal India, it said, adding that prolonged rainfall shortfalls could adversely affect kharif crop production and farm incomes, thereby posing downside risks to tractor demand and sales.
Tractor industry’s wholesale volumes for the previous month rose 11.9% year-on-year, while retail increased 25.3% in June 2026.