India's weather forecasters are sounding alarms: July's rain will likely fall short, compounding June's 40% deficit . With a 'super' El Niño looming,agriculture and rural incomes could take a hit.
On June 23,Union Agriculture Minister Shivraj Singh Chouhan flagged the risks,pointing to Kharif crops' vulnerability. June saw just 99.5 mm of rain,far below the 165.3 mm average . That's 39.8% shortfall.
A weak monsoon could disrupt India's economy three ways: lower farm output,shrinking rural incomes,higher food prices. Agriculture is crucial despite being only 20% of the GVA; it employs 46% of the workforce, supports 55% of people .
Despite a healthy 357.73 million metric tonnes of food grain predicted for 2024-25, the current monsoon deficit threatens this growth. Experts urge Tamil Nadu to set up a cell to monitor El Niño's potential agricultural impact .
While paddy areas may grow in Punjab,Haryana,maize might lose out to more profitable crops like pulses, needing less water. This shift could spike food inflation,with the Reserve Bank of India warning in June that a bad monsoon could hurt growth and inflation.
Data shows CPI inflation rose to 3.9% in May 2026 from 3.5% in April,with food,fuel costs up. Edible oils,potatoes,onions,tomatoes—all pricier. Global food prices are climbing too, driven by rising fertilizer, shipping costs.
Prof. R. Ramakumar from Tata Institute of Social Sciences says farm incomes could drop 10% due to monsoon issues. The rural non-farm sector, reliant on agriculture, would suffer too,hitting industries like car sales first,then real estate in smaller towns.
Kotak Mutual Fund predicts a 20 to 65 basis point GDP growth cut if El Niño and drought hit together. West Asia's conflict is also disrupting fertilizer supplies, adding to agriculture's woes . Union Cabinet approved a ₹41,533 crore subsidy for fertilizers this Kharif season to help.
If farm output falls,the government may release buffer stocks,import more—widening the Current Account Deficit,pressuring the rupee. Prof. Ramakumar warns this weak monsoon,geopolitical tensions could worsen economic vulnerabilities . PM Modi urged limiting gold buys,foreign travel to ease reserve stress .
Agricultural exports,with an 8.2% CAGR from 2020 to 2025,contributing 12% to core exports, are also at risk. Dipti Deshpande of CRISIL says agriculture's stability is key to maintaining growth.
El Niño has historically brought droughts to India,notable years being 1972, 1982,2009,2015. The IMD noted six of 11 subpar monsoons since 2000 were El Niño years, five with deficient rain. The economic toll varies; 2009 and 2015 droughts shrank crop GVA by 2.5%,3.2%,inflation hit double digits.
In 2015, proactive food management cushioned monsoon failures,keeping inflation in check. Yet Kharif output losses during El Niño years have dropped from 17% to 1.4% since 2015,prolonged poor weather still threatens agricultural GVA,averaging 1.3% in El Niño years, versus 5.5% in normal years.
With 315 districts at risk from poor monsoons, 111 in key states lacking irrigation,the situation is dire. Over half of India's farmland relies on rain. Prof. Ramakumar stresses the need to 'drought-proof' the economy with drought-resistant crops, risk-reduction policies, as crop insurance isn't enough.
