New Delhi, Feb. 26 -- The outlook for India's tractor sector remains subdued in the coming years due to the anticipated El Nino effect, which may weaken the monsoon and weigh on rural demand, according to a report by HSBC.

The report noted that the onset of El Nino and a high base are expected to keep tractor volume growth under pressure over FY26-FY28. HSBC estimates tractor volume CAGR of 0-2 per cent during this period, indicating muted expansion in the near term.

It stated "The outlook for the tractor sector is now subdued, primarily due to the anticipated El Nino effect, which may weaken the monsoon this year".

Historically, El Nino years, or even the year following the event, have been associated with declines in tractor volumes ...