The below 50 HP segment accounts for nine out of 10 tractors sales sold in India, the world's largest tractor market by volumes, and this relaxation, if implemented, will be a substantial relief for tractor makers.

At present, tractors below 50 HP fall under TREM IIIA emission norms, while those above 50 HP follow TREM IV norms. The government had planned to upgrade all horsepower categories to the stricter TREM V emission norms from next year—which would mean the smaller tractors would have to make a significant change in emissions.

The government plans to introduce an intermediate standard for below-50 HP tractors between TREM IV and TREM V to limit the electronic changes in engines. The move is aimed at keeping tractor prices in check.

A direct leap to TREM V would have sharply raised the price of entry-level tractors, disproportionately hurting small and marginal farmers. By inserting an intermediate standard, the government is attempting a middle path—tightening emission rules without making essential farm machinery unaffordable.

The TREM V target will, however, continue for tractors powered by engines more than 50 HP.

Compliance with TREM V alone is estimated to push tractor prices up by 15-20%. For instance, a 45 HP tractor that meets TREM III A norms and sells for around ₹7.80 lakh could cost anywhere between ₹8.97 lakh and ₹9.36 lakh once upgraded to full TREM V standards. The industry is still working on the mid-standard version, which is expected to be less expensive but is yet to be finalized.

The move is crucial for India's $9.4-billion tractor market, home to manufacturers such as Mahindra & Mahindra, Sonalika, TAFE, Escorts Kubota and John Deere, with the revised emission norms now likely to take effect from 1 April next year.

India's total domestic tractors sales stood at 939,725 units in FY25 compared with 867,085 units in FY24.

"We are not insisting on the 1 April 2026 deadline as such now. We are looking at a solution somewhere between TREM IV and TREM V. The final decision will depend on the agriculture ministry's advice," said one of the two officials cited above.

Industry pushback

Manufacturers have been lobbying for relief, flagging surging costs and supply-chain constraints. They argue that full TREM V compliance requires electronic systems and sensors that could increase tractor prices by at least 15%, making them unaffordable for small farmers.

The second official said the difference between TREM IV and TREM V is largely around particulate matter (PM). They added that, unlike in other countries, Indian tractors mostly operate in fields rather than cities—and the dust from soil already contributes heavily to particulate matter levels.

"Achieving major PM reduction requires introducing electronic systems, which could increase tractor costs, servicing challenges and performance issues in harsh farm conditions," the official said.

The agriculture ministry had set up a committee to study the matter. "The committee has completed its report, and while an informal copy has been shared, the industry is still waiting for its formal release," he confirmed.

The first official clarified that no rule has been amended yet because they want to proceed only after receiving clear guidance from the agriculture ministry.

Cost implications

Experts warn that the shift to higher emission standards could also dilute some of the benefits of the recent GST cut on tractors.

Ashim Sharma, senior partner at Nomura Research Institute (NRI) Consulting, said the TREM V transition requires combustion upgrades (Common Rail, Exhaust Gas Recirculation), exhaust after-treatment (DPF, SCR) and advanced sensors.

"These could add 15-20% to the cost of smaller tractors, offsetting gains from the recent GST cut," said Sharma.

On 4 September, the GST Council reduced GST on tractors (except road tractors for semi-trailers above 1800cc) to 5% from 12%, a step to boost affordability among the farming community and increase mechanization. According to the people associated with tractor industry, the current level of mechanization, in India is 47% as compared to countries like Brazil (75%) and China (60%).

Call for India-specific approach

Some industry executives, expressed the need to focus on India-specific solutions rather than following global standards.

"There is a need for a balanced and India-specific solution—one that contributes to environmental protection while aligning with local farming practices, affordability and serviceability needs of Indian farmers. The industry is exploring that how the required emission norms can be achieved through mechanical interventions instead of complicated sensors and other electronic devices," said a technical head working with one of the leading tractor makers.

Manufacturers under the Tractor and Mechanization Association (TMA) had earlier urged the government to defer TREM V rollout, citing higher costs and system complexity. They warned that fully electronic TREM V-compliant tractors could become at least 15% more expensive and costlier to service, making them unaffordable for a large section of small and marginal farmers and potentially slowing mechanization.

"Indian farmers typically rely on tractors below 50 HP, unlike European farmers who use 200-250 HP models for larger landholdings. This sub-50 HP segment accounts for over 90% of tractor sales in India. Any price increase directly affects small and marginal farmers," said A.S. Mittal, president of TMA and vice-chairman of Sonalika Group.

An email sent to the ministry of agriculture and farmers' welfare and the ministry of road transport and highways on the status of TREM V implementation did not elicit a response.

Farmer concerns

"Any rise in tractor prices impacts farming practices. We urge the government not to bring in a harsher norm that adds to farmers' debt burden," said Jagjit Singh Dallewal, farm leader and convenor of the Samyukta Kisan Morcha (Non-Political).

In India, the emission standards for tractors and construction equipment are regulated separately from the broader automobile industry, which has already moved to BS-VI norms from April 2020.

According to Crisil Ratings, tractor sales are expected to reach a record 9.75 lakh units in FY26, growing 3–5% year-on-year, aided by an expected above-normal monsoon, higher MSPs for key crops, and stronger replacement and construction-linked demand.