The India Meteorological Department (IMD) on Friday said India is likely to receive less than 94% of the Long Period Average (LPA) rainfall during the second half of the June-September monsoon season. The August-September LPA, based on the 1971-2020 climatological record, is 422.8 mm.

The forecast follows a volatile start to the southwest monsoon. June rainfall was 35.4% below the LPA before rebounding to 1% above normal in July, when the country received 283.3 mm against the normal 280.5 mm, despite the IMD forecasting below-normal rainfall for the month.

Below-normal rainfall is very likely across much of the country during August-September, except parts of peninsular, central and northwest India, and east and northeast India, where rainfall is expected to be normal to above normal, the IMD said.

"July witnessed a substantial improvement in monsoon performance compared to June. The share of districts with normal or better rainfall increased from 30% (224 districts) in June to 53% (388 districts) in July, while deficient and large deficient districts declined from 69% (508 districts) to 46% (344 districts)," said Mrutyunjay Mohapatra, director general of meteorology, IMD.

The IMD had cut its June-September monsoon forecast to 90% of the LPA from 92% on 29 May, citing El Niño conditions. India last recorded a below-normal monsoon in 2023, when rainfall was 95% of the LPA. The department also expects August rainfall alone to remain below normal at less than 94% of the LPA.

Inflation risks

Economists said another spell of weak rainfall could hit kharif crops and perishable vegetables, hurting farm incomes, rural demand and food prices.

"It depends on where the rain deficit regions are, if they are in predominantly agricultural zones then we will certainly see an inflation in food prices. The kharif crops will be the most affected, and leafy vegetables. This has a direct impact on farmer life and agriculture supply chains. There could be pressure on the government to compensate for this loss," said Gurudas Nulkar, director, Centre for Sustainable Development, Gokhale Institute of Politics and Economics (GIPE), Pune.

He added that if rainfall remains around 94% of the LPA and deficits are concentrated outside major food-producing states, the economic impact is likely to be manageable.

The IMD also projected normal to above-normal minimum temperatures across most of the country during August, a combination that experts said could increase heat stress and reduce soil moisture in rain-fed regions.

"A below-normal August monsoon is unlikely to derail India's overall growth story, but it does raise risks for agriculture, rural demand and food inflation. The economy is more resilient than in the past, yet any persistent rainfall shortfall during the sowing season can push up prices for pulses and oilseeds and add to inflationary pressures," said Anjal Prakash, professor of public policy at FLAME University, Pune.

"The immediate concern is not a collapse in growth, but a hit to farm incomes and food prices. If the rainfall deficit persists, inflation could stay elevated even if the wider economy remains broadly stable," he added.

The southwest monsoon accounts for more than 70% of India's annual rainfall, while about 45% of the country's net sown area remains rain-fed. A good monsoon supports rural demand, while weak rainfall weighs on consumption.

S&P Global Ratings warned on 6 July that a weak monsoon could push India's inflation to 5.1% in FY27, hurt rural demand and pressure sectors from agriculture and microfinance to tractors and two-wheelers. It also cautioned that higher agricultural input costs due to geopolitical tensions could further squeeze farm incomes and lift food prices.

The risks come as inflation has already begun to firm. Retail inflation accelerated to 4.38% in June, driven by higher food and fuel prices, breaching the Reserve Bank of India's 4% midpoint target for the first time since January 2025. Food inflation rose to 5.32% from 4.78% in May.

Sowing under pressure

The finance ministry's July Monthly Economic Review said kharif sowing has moderated because of the weak start to the monsoon and warned that a projected transition to El Niño poses downside risks, although strong paddy and wheat buffer stocks provide some protection.

Kharif sowing remains behind last year's pace. Farmers had planted crops across 78.7 million hectares as of 24 July, compared with 82.6 million hectares a year earlier, according to agriculture ministry data. Acreage under paddy, pulses, oilseeds and cotton remains below last year's levels, although the gap has narrowed as rainfall improved.