Key Takeaways:
India's monsoon is expected to reach just 90% of its long-period average in 2026, the first below-normal rainfall in three years.
India is likely to see below-average monsoon rains for the first time in three years in 2026, with rainfall expected at 90% of the long-period average, the government said Friday, stoking concerns over farm output and growth in Asia's third-largest economy.
"The monsoon is expected to reach 90% of the long-period average this year," M. Ravichandran, secretary in the Ministry of Earth Sciences, told a press conference.
June rainfall is also forecast below normal at less than 92% of the LPA, while maximum temperatures across most of India are expected to run above normal during the month. The India Meteorological Department had earlier predicted the onset of seasonal rains in Kerala between May 28 and June 3, about five days ahead of the normal June 1 start date.
A weak monsoon threatens agricultural output in a country where nearly half the workforce depends on farming. India's foodgrain production hit a record 376 million tonnes in the 2025-26 crop year, and any shortfall in rainfall could reduce yields of key summer-sown crops such as rice, sugarcane, and cotton, driving up food inflation and pressuring the Reserve Bank of India's monetary policy stance.
The below-normal forecast marks a reversal after two consecutive years of adequate rainfall that had helped rebuild reservoir levels and support rural demand. The last below-average monsoon occurred in 2023, when rainfall came in at 94% of the LPA, contributing to a spike in tomato and vegetable prices that pushed retail inflation above the RBI's 6% upper tolerance band.
Food inflation remains a persistent risk for the Indian economy. Consumer price index data for April showed retail inflation at 4.2%, within the RBI's 2%-6% target range but with food components running hotter. A weak monsoon could push headline inflation back toward the upper end of the band, complicating the central bank's rate path. The RBI has held its benchmark repo rate at 6.50% since February 2023, and markets have been pricing in a potential cut in the second half of 2026 as growth moderates.
The agricultural sector accounts for about 15% of India's $3.9 trillion economy and supports the livelihoods of more than 250 million farmers and associated workers. Below-normal rainfall typically reduces kharif (summer) crop output, with rice — India's staple grain — particularly vulnerable. India is the world's largest exporter of rice, and any production shortfall could lead to export restrictions, affecting global food prices. The country also accounts for about 18% of global sugar production and is a major cotton grower.
Rural demand, which contributes roughly a third of India's consumption, is also at risk. Two-wheeler sales, tractor purchases, and fast-moving consumer goods volumes in rural markets tend to correlate closely with monsoon performance. A weak monsoon could slow the recovery in rural spending that had been gaining momentum after two good rainfall years.
The IMD will update its forecast in its third-stage long-range outlook in July, after the monsoon's progress over the subcontinent becomes clearer. The June-September rainy season delivers about 70% of India's annual precipitation and is critical for the country's rain-fed agricultural areas.
This article is for informational purposes only and does not constitute investment advice.
