Slow monsoon start clouds farm, inflation outlook

India’s southwest monsoon has started on a weak note, raising concerns over summer crop sowing, reservoir levels and food inflation at a time when the economy is already facing pressure from higher fuel costs and geopolitical uncertainty.

Rainfall has been sharply below normal in several parts of the country since the monsoon season began earlier this month.

Mumbai is facing its driest June in 12 years, while Maharashtra has received 75% less rainfall than average in the first 16 days of the month, Reuters reported.

Nationwide, India was experiencing its weakest monsoon in 11 years. The India Meteorological Department (IMD) had already warned that the 2026 southwest monsoon would likely be below normal.

In its April long-range forecast, IMD said seasonal rainfall during June to September was likely to be 92% of the long-period average, with a model error of plus or minus 5%. The long-period average for the season, based on 1971 to 2020 data, is 87 cm.

IMD later said rainfall for June was likely to be below normal, at less than 92% of the long-period average. The weather office said the June rainfall LPA, based on 1971 to 2020 data, is 165.4 mm.

The early shortfall matters because June marks the start of sowing for key kharif crops including rice, cotton, soybeans, pulses and oilseeds. A delay in rains does not always translate into a poor harvest if rainfall improves in July and August, the most important months for crop development. But a weak start can delay planting, reduce soil moisture and increase the risk of uneven crop establishment.

Mumbai’s situation shows how quickly a weak monsoon can become an urban supply problem. Authorities in the financial capital cut water availability to industrial and commercial users by 20%, after already imposing a 10% reduction in mid-May. The city’s reservoirs were at just 10.35% of capacity, enough for about 40 days, Reuters reported.

The risk is broader than water supply. Agriculture remains exposed to monsoon swings, even though irrigation coverage has improved. About 55% of India’s cropped area is now irrigated, compared with 40% in 2010, giving the farm economy more protection than in previous drought years. But large areas remain rain-fed, especially for pulses and oilseeds, where output shortfalls can feed quickly into food inflation.

The weak rains also come as inflation has started moving higher. India’s retail inflation rose to 3.93% in May from April levels, with food inflation rising to 4.78%, according to government data. The Reserve Bank of India has raised its inflation forecast for the current fiscal year to 5.1%, from 4.6% earlier.

A poor monsoon could complicate that inflation path. Food has a large weight in India’s consumer price basket, and rainfall deficits can affect cereals, pulses, vegetables, milk and fodder costs. Even when grain stocks are adequate, vegetable prices can spike quickly because supply chains are more perishable and region-specific.

El Niño is another concern. IMD has forecast below-normal rainfall amid the expected development of El Niño conditions, which typically suppress rainfall over India.

The government and RBI will be watching the progress of rains through late June and July. If rainfall revives, the early deficit may be partly offset. If the shortfall persists into the main sowing window, pressure could build for supply-side interventions including stock releases, import duty cuts, export restrictions or procurement support.