When the rains fall short, so does farm growth

India's 2026 southwest monsoon rainfall was 87% of its long-period average, the lowest since 2015, according to rating agency ICRA. This deficit led to a downgrade of ICRA's agriculture, forestry, and fishing growth forecast for the fiscal year to around 1% from 1.3%. The uneven and deficient rains have already impacted kharif sowing, which was 1.2% below the previous year by the end of September.

Depleted reservoir levels have raised concerns about the upcoming rabi season, especially in southern and some northern states. ICRA cautioned that weaker farm incomes could dampen rural demand in the second half of fiscal year 2027 and create upside risks to food inflation. Rainfall during June-September was 87% of the long-period average, with June rainfall at 60% of LPA, July at 103%, August at 84%, and September at 93%.

The rainfall distribution was uneven, with the East and Northeast receiving 74% of LPA and the South Peninsula 76%, both in the deficient category. Central India had normal rainfall at 97% of LPA. Kharif acreage was 110.7 million hectares at the end of September, about 1.2% below the year-earlier level. Reservoir storage stood at 71% of full reservoir level as of September 24, significantly below the previous year's 90% and the historical average.

The impact of the weak monsoon varied across states, with southern India and parts of the north facing the greatest risks.