IMD projects 8% below-average rainfall for 2026, raising concerns over agricultural output and inflation pressures in India.
India’s Meteorological Department forecasts an 8% shortfall in monsoon rainfall for 2026, citing a strong El Niño event. The agency assigns a 66% probability of below-normal or deficient rainfall, with heatwaves expected in the April-June quarter.
Agriculture contributes 16-17% to India’s GDP but employs nearly half the workforce. The crops sub-component of gross value added, half of the agriculture sector, closely tracks foodgrain output, amplifying potential economic risks.
While foodgrain stocks and irrigation may mitigate price pressures, the severity and distribution of rainfall will determine the impact on growth and inflation. The RBI is expected to hold rates steady in 2026 despite supply-side risks.