India – The Indian government has reduced the Goods and Services Tax (GST) on tractors and agricultural equipment from 12% to 5%, effective September 22, 2025. Union Agriculture Minister Shivraj Singh Chouhan has urged manufacturers to pass on these savings directly to farmers, potentially lowering tractor prices by ₹23,000 to ₹63,000 ($280–$760 USD).
Price Reductions by Tractor Category
The GST cut is estimated to reduce prices across various tractor categories as follows:
- 35 HP: Up to ₹41,000 (~$500 USD)
- 45 HP: Up to ₹45,000 (~$550 USD)
- 50 HP: Up to ₹53,000 (~$650 USD)
- 75 HP: Up to ₹63,000 (~$760 USD)
- Compact tractors (horticulture): Up to ₹23,000 (~$280 USD)
The GST reduction will also make renting agricultural equipment from Custom Hiring Centers (CHCs) more cost-effective. This is expected to increase accessibility for farmers who cannot afford to purchase machinery outright, enabling them to rent tractors, threshers, harvesters, rotavators, and power tillers at lower rates.
The minister highlighted that mechanization is key to increasing agricultural productivity and reducing farming costs. The GST cut aims to make equipment like tractors, seed drills, and rotavators more affordable, encouraging wider adoption and supporting efficient sowing, harvesting, and irrigation practices.
This initiative comes at a critical time, as farmers face rising costs, labor shortages, and climate-related challenges. The GST reduction is expected to accelerate agricultural mechanization, improve efficiency, and make farming more profitable ahead of the Rabi season.
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