After the massive spike in crude oil prices during the West Asia conflict, India's next concern-that of a weak monsoon is soon emerging as an inflation
risk as per experts. With El Nino forming and threatening to contain rainfall and spike food prices, economists see this as a fresh sign of worry. The southwest monsoon, accounts for around 70 percent of India’s annual rainfall, and is essential for the 300 billion dollar farm economy and impacts food rates and rural demand as well. Senior Economist, Mitali Nikore told Timesnownews.com, "after crude oil, a weak monsoon is India’s second supply-side shock of 2026-and the more structural of the two. The IMD’s forecast of rainfall at 90% of the long-period average, the weakest since 2015, lands on an economy where close to 45% of net sown area is still entirely rain-fed — the legacy of decades of under-investment in minor irrigation and watershed development that successive plans never closed. With nearly two-thirds of our major reservoirs below half their capacity entering June, the squeeze on kharif sowing, rural incomes and food inflation is already visible. And this is no longer only a rural story: as urban heat islands push city temperatures 2-8°C above their rural surroundings, India is on course to lose the equivalent of 5.8% of working hours- roughly 34 million full-time jobs- to heat stress by 2030. Heat is now an urban-growth problem too: India’s cities house barely a third of its people but generate close to two-thirds of GDP, and city-level resilience studies already put heat-driven productivity losses at 2-4% of economic output by 2050 in places like Lucknow, Chennai and Surat. Water and heat have become macroeconomic variables, not seasonal footnotes." Experts also believe a below-normal monsoon could limit room for the Reserve Bank of India to cut interest rates further, therefore impacting borrowing costs and consumer demand further going forward.
