GST cut, strong monsoon to lift farm machinery demand in H2 FY26
Hindu, 28 Nov '25
The overall market outlook for farm equipment and agriculture machinery in the second part of FY26 appears positive, said Antony Cherukara, CEO, VST Tillers Tractors.
"A favourable monsoon, improved reservoir levels, and the recent GST reduction on farm machinery are expected to significantly increase rural consumption of farm equipment and boost mechanisation in the country's agriculture sector," he told media sources on 25th November, 2025.
He said the farm segment was performing well this year, supported by favourable policies and improved affordability of farm machinery for small and marginal farmers. The growth momentum continued in November, he added.
"We expect the second half of the fiscal to perform better than H1. Plus, the reduction of GST on farm machinery from 12% to 5% has already begun to trigger demand and will have a sustained positive impact, especially in the second half of the year," he anticipated.
Further explaining, Mr. Cherukara said, "You can practically say 12% to 5% means one or two EMIs are taken care of. The GST cut directly supports the smaller farmer," adding that the benefit would be felt most in smaller horsepower categories, including tractors, power tillers, and power weeders.
On the broader industry trend where small and mid-sized farmers are increasingly opting for higher horsepower tractors, he explained that many mid-level farmers buy bigger tractors not only for their own farms but also to rent them out for agricultural and commercial purposes.
"Farmers with less than 5 acres cannot afford tractors; they use power tillers. Farmers with 5 to 15 acres often buy bigger tractors because they earn by renting them out," he elaborated.
According to Mr. Cherukara, VST has observed an uptick in demand in the last two months, supported by festive demand and improved sentiments in rural markets.
The company's key markets for tillers include the paddy-growing regions across eastern, southern, and western India, spanning Assam and Odisha to Andhra Pradesh, Tamil Nadu, Kerala, and Karnataka. Tractor demand is also expected to grow domestically this year.
