The India Meteorological Department expects this year’s monsoon to fall about 10% short of normal, with El Niño strengthening through the season. In an economy where nearly half of farmland depends on rain, that forecast is an economic forecast too.
Every year, India waits for one weather forecast more than any other. This year’s is not good news. The India Meteorological Department expects the monsoon to deliver about 10% less rain than its long-period average, as El Niño conditions build in the Pacific Ocean. Tomato prices had already jumped in May. In an economy where roughly half of all farmland still depends on rain rather than irrigation, a rainfall forecast is an economic forecast.
From the Pacific to your plate
El Niño is a periodic warming of the central and eastern Pacific Ocean that shifts wind patterns across the world. In most El Niño years, India’s monsoon is weaker than normal. Less rain during June to September means smaller kharif harvests of rice, pulses, oilseeds and vegetables, and lower water levels in reservoirs that feed the following winter’s crops.
Smaller harvests mean higher food prices, and food is the single largest item in the inflation basket. Economists estimate that each percentage point by which rainfall falls short of normal adds a fraction of a percentage point to food inflation, though buffer stocks of rice and wheat cushion the effect on cereals.
In India, a weather map is a price chart drawn a few months early.
The rural income chain
A weak monsoon also hits the rural economy directly. Farmers earn less, farm labourers find less work, and rural households cut back on motorcycles, tractors, fertiliser and consumer goods. That is why companies selling to rural India watch the monsoon as closely as the RBI does. Arriving on top of an oil shock, a poor monsoon is the RBI’s second inflation worry of the year, and it narrows the room for any future rate cut even further.
Sources: India Meteorological Department long-range forecast, May 2026.
- The IMD forecasts a below-normal monsoon, about 10% short of the long-period average.
- El Niño, a warming of the Pacific, tends to weaken the Indian monsoon.
- A weak monsoon reduces kharif harvests and pushes up food prices.
- Economists estimate each percentage point of rainfall shortfall adds a fraction to food inflation.
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