In a historic step, the government has reduced the GST on agricultural machinery to 5% from 12% and 18%, making this decision a source of farmers’ empowerment and agricultural productivity. This significant GST reduction is effective from today, 22nd September, 2025, making modern farming equipment more affordable, reducing the cost burden on farmers, and promoting mechanization across the country.

What are the changes? 

Tractors with engine capacities of up to 1800 cc, and a wide variety of farm equipment , including ploughs, cultivators, seeders, sprayers, harvesters, and their spares including tyres and tubes, now only attract 5% GST only. Previously, they were charged at 12% or 18%, which increased their retail prices and affected the financial capacity of most farmers to afford modern farm equipment.

The updated tax cuts are applicable to all the Indian states and union territories without any difference, meaning that the farmers of Punjab as well as in Tamil Nadu can enjoy equal benefits in terms of lower prices. As an illustration, a 4-row paddy transplanter will now be selling at a price discounted by approximately 15,400 less, and a 13-HP power tiller will be at a reduced cost of approximately 12,000 less. The reduced tax rate has even made the cost of tractor tires, which is constantly changing by farmers, to be cheaper.

Price reduction official list

• A 35 HP tractor will now be cheaper by ₹41,000
• A 45 HP tractor will now be cheaper by ₹45,000
• A 50 HP tractor will now be cheaper by ₹53,000
• A 75 HP tractor will now be cheaper by ₹63,000
• Seed-cum-fertiliser drill (11 tyne): cheaper by ₹3,220
• Trailer (5-tonne capacity): cheaper by ₹10,500
• Baler square (6 ft): cheaper by ₹93,750
• Mulcher (8 ft): cheaper by ₹11,562
• Seed-cum-fertiliser drill (13 tyne): cheaper by ₹4,375
• Harvester combine cutter bar (14 ft): cheaper by ₹1,87,500
• Straw reaper (5 ft): cheaper by ₹21,875
• Power weeder (7.5 HP): cheaper by ₹5,495
• Super seeder (8 ft): cheaper by ₹16,875
• Happy seeder (10 tyne): cheaper by ₹10,625
• Rotavator (6 ft): cheaper by ₹7,812
• BPneumatic planter (4-row): cheaper by ₹32,812
• Tractor-mounted sprayer (400-litre capacity): cheaper by ₹9,375

Why This Matters to Farmers

By decreasing the GST of farm machinery, it will decrease the initial cost incurred to purchase and maintain farm machinery. This savings of costs motivates farmers to replace traditional and labor intensive equipment with modern machines that will enhance efficiency, save time and boost crop production. To increase the productivity of farms and to boost the incomes of farmers, which is aligned to the vision of the government of doubling the Farmers Incomes and a sustainable agricultural future, mechanization comes in.

The government has also encouraged manufacturers and custom hiring centres to make certain that the tax benefit is clearly transferred to farmers through reduction of rental rates as well as reduction in the functions of intermediaries.

Government and Industry Response 

A meeting was held with key agriculture machinery associations that the union Agriculture Minister Shri Shivraj Singh Chouhan chaired to discuss the implementation of the GST rate cuts smoothly. This step of the government is celebrated by the industry representatives who assured that they would assist in realizing maximum benefits to farmers throughout the country.

What does this mean for Indian Agriculture?  

The standardized 5% GST rate on farm implements will transform agricultural practices by making the advanced equipment very accessible. Such fiscal relaxation will give the small and marginal farmers the capacity to use technology and modernise, lessen reliance on manual labour, and satisfy the increasing food demand in the country more effectively.

As affordable tractors, harvesters, and implements become available, Indian agriculture can look forward to a healthy transformation to mechanized, profitable, and sustainable agriculture - a new dawn of prosperity in the workhorse in the Indian economy.  

Agricultural economist Ashok Gulati has warned that India risks jeopardising $50 billion worth of exports if it refuses to engage in agriculture in the ongoing trade negotiations with the United States. In an exclusive interview with India Today, he said India should rationalise tariffs on farm goods and not fall for "ideological" fears.

"That agriculture is not insulated from the economy," Gulati said. "We are importing $37 billion worth of farm products, and from the U.S. alone we import just $2 billion. Against that, we export about $5.9 billion. If we remain rigid and refuse to open up any sector, we risk losing the big export of $50 billion."

He stressed that India already relies heavily on imports. "We are not living in autarky," he said. "Almost 55 to 60 percent of the edible oil that you consume is imported. To say we will not allow any imports is ridiculous."

Agriculture and dairy have emerged as the biggest sticking points in the proposed India-US trade deal, with Washington pressing New Delhi to lower tariffs on farm goods. India has so far held firm, citing the need to protect its farmers and rural economy.

India's tariffs, he argued, were overdue for reform. "If edible oil can come at 10 percent duty and cotton at zero, then why do we have 45 percent duty on corn, 50 to 60 percent on soybean, or skimmed milk powder?" he asked. "We have been unduly overprotective. My feeling is 80 percent of our agriculture is very competitive."

On the sensitive issue of genetically modified crops, Gulati called India's policy inconsistent. "Ninety-five percent of cotton in this country is GM, and its seed is fed to poultry and cattle," he said. "But we say corn, which is mostly feed, cannot be GM. That's not based on science. It's an ideology."

He suggested calibrated measures such as tariff-rate quotas. "Up to two million tons of corn could be allowed when production is around 42 million tons," he said. "Even if you open up, sometimes you will import, sometimes you will export. Prices are already close to international levels."

Gulati pointed to the risk of retaliation if India remained inflexible. "Our biggest agricultural export to the U.S. is shrimp, worth billions, and it goes at almost zero duty," he said. "If they put a 50 percent tariff on it, those exports will collapse overnight. Are we ready to bear that loss — and the political fallout in Andhra Pradesh?"

The economist urged negotiators to strike a balance. "Trade is always give and take," he said. "If they want self-sufficiency in agriculture, first thing they should do is stop all the imports of edible oils which are 17 billion dollars. 55 to 60% of your consumption of edible oil is being imported. Why are you importing that? Are the farmers of oil seeds not important? So this hypocrisy should not be a part of the negotiation. Trade negotiations are give and take." 

Today, on 19th September,2025, Union Minister of Agriculture and Farmers Welfare and Rural Development, Shivraj Singh Chouhan, chaired a pivotal meeting on GST reforms for the Agriculture Sector. 

The discussions were on the implementation of the GST rate cut on machinery and equipment in agriculture that was recently reduced by half to 5% instead of 12-18% effective on 22 September, 2025. This historic reform would make farm machinery much more affordable, lower production expenses, and increase the income of farmers.

Benefits for Farmers and Agriculture Economy 

In his response to the media following the meeting, Minister Chouhan said the GST reforms are “extremely helpful and beneficial” to farmers in India. He stressed that such reforms would give the agricultural sector a new impetus, allowing farmers to achieve higher prices, and agribusiness would become more open and easier.

Shivraj Singh Chouhand said, "GST on bio-pesticides and micronutrients has been reduced, which will benefit farmers. Also, the trend of farmers towards bio-fertilizers from chemical fertilizers will definitely increase. GST exemptions in the dairy sector, including on milk and cheese, will help the common man as well as cattle breeders and milk producers."

He also said that the government’s commitment is absolute; these reforms are sure to drop the input costs, increase production and profitability, and bring prosperity to farmers and rural India. 

Key Outcomes of the Meeting

• Discount of tractors and tools: Retail price reductions are forecasted to be 5% and will save between Rs 23,000 and Rs 63,000 based on horsepower and type of tractor. 
• Subsidy and Tax Benefits: Farmers will receive two benefits of government subsidies and reduced GST, which will decrease the total costs of cultivation. 
• Target Custom Hiring Centres (CHCs): The reduction of rental fees due to cheaper farm machinery purchase will provide access to mechanization within small and marginal farmers at CHCs.
• Industry Involvement: The industry representatives of major industry associations such as Tractor and Mechanisation Association (TMA), Agricultural Machinery Manufacturers Association (AMMA), All India Combine Harvester Manufacturers Association (AICMA), and Power Tiller Association of India (PTAI) attended and promised to spread these benefits.

The Vision of Agricultural Growth by Government

Under this reform, the government will enhance farm mechanization, efficiency, agricultural productivity, and localized manufacturing in the Atmanirbhar Bharat initiative. Closely collaborating with stakeholders is also the Ministry of Agriculture and Farmers Welfare to make the implementation as smooth and transparent as possible.

On September 4, the Ministry of Education published the National Institutional Ranking Framework (NIRF) 2025 rankings, which show the best colleges and universities in 17 categories, including agriculture and allied sciences. Delhi Indian Agricultural Research Institute (IARI) has topped the list 10th time consecutively in this critical category, closely trailed by the ICAR-National Dairy Research Institute (NDRI) in Karnal, Haryana. Punjab Agricultural University (PAU) retained the third position and remained one of the major actors in agricultural learning. 

NIRF 2025 Agriculture and Allied Sectors top 10 institutes 

• Indian Agricultural Research Institute (IARI), New Delhi
• ICAR - National Dairy Research Institute (NDRI), Karnal, Haryana
• Punjab Agricultural University, Ludhiana, Punjab
• Banaras Hindu University (BHU), Varanasi, Uttar Pradesh
• Indian Veterinary Research Institute (IVRI), Izatnagar, Uttar Pradesh
• Tamil Nadu Agricultural University (TNAU), Coimbatore, Tamil Nadu
• Sher-e-Kashmir University of Agricultural Science and Technology, Kashmir
• Central Institute of Fisheries Education, Fisheries University, Mumbai
• G.B. Pant University of Agriculture and Technology, Pantnagar, Uttarakhand
• Chaudhary Charan Singh Haryana Agricultural University, Hisar, Haryana

Agriculture Institutes NIRF Rankings 

Agriculture has stood as a pillar of the Indian economy, providing more than 15 per cent of the GDP and a large number of people with employment. The NIRF rankings measure teaching quality, research, practices, resources, and the excellence of the institutions, so they are credible resources when students are planning a career in the sphere of agriculture and other related fields.

IARI, New Delhi, enhanced its academic and research excellence image by securing the top spot again with a high rating, indicating strong faculty, advanced research initiatives and industry connectivity. The second one is the National Dairy Research Institute of Karnal, popularly referred to as ICAR, and it is ranked second due to its innovativeness in researching and extension services in dairy. With a slight increase in the ranking score, Punjab Agricultural University, which is in the top three due to its role in crop science and sustainable agricultural practices, is still in the top three.

Other Agriculture Institutions 

Other institutions that made it to the top ten list are Banaras Hindu University, the Indian Veterinary Research Institute (IVRI) at Izatnagar, Tamil Nadu Agricultural University (TNAU) and Sher-e-Kashmir University of Agricultural Science and Technology of Kashmir. These institutions have a good reputation in their specialised courses in veterinary science, horticulture, fisheries and food technology. 

More importantly, the rankings also show increased influence of the private universities like Amity University and Lovely Professional University in the top 20, indicative of a broader increase in quality of agricultural education than the traditional universities. 

Why These Rankings Matter

These rankings offer crucial information to a student wanting to pursue quality education and research in agriculture and other related sectors, in ensuring India meets its food security, rural employment, and sustainable development objectives.

This list can serve as a reference point to students who intend to pursue a career in agriculture, searching primarily at the institutions that provide high-tech education, high-quality infrastructure, and industry links that will improve employability and growth opportunities.