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India's Farm Sector Faces Triple Threat: Weak Monsoon, El Nino, War Risks

India's agricultural sector is bracing for a challenging year due to a forecast of below-normal monsoon rainfall, the potential development of El Nino conditions, and supply risks for fertilizers linked to the West Asia conflict. These factors threaten kharif crop sowing, agricultural output, and farm incomes, which could push consumer price inflation above 4.5%. While current reservoir storage levels are above historical averages, providing some buffer, the overall risks are significant. The final impact on growth and inflation will hinge on the monsoon's actual performance and geopolitical developments in the coming months.

Key Points: India's Agriculture Under Threat from Monsoon, El Nino, War

  • Below-normal monsoon forecast at 92% LPA
  • El Nino poses 62% probability risk
  • West Asia conflict threatens fertilizer supply
  • Food inflation may exceed 4.5%
  • Higher reservoir levels offer some cushion
3 min read

Indian agricultural sector under threat by trifecta of below-Normal Monsoon, El Nino, and West Asia war: ICRA

ICRA warns of risks to crops, food prices, and rural demand from below-normal monsoon, El Nino, and fertilizer supply chain disruptions.

"Sub-par rainfall is expected to weigh on sowing of kharif crops, and consequently, agricultural output, farm cash flows and food prices. - ICRA"

New Delhi, April 15

India's agriculture sector may face a challenging year ahead amid concerns over weak monsoon, possible El Nino conditions, and fertilizer supply risks linked to the West Asia conflict, according to a report by ICRA.

The India Meteorological Department's (IMD) first long-range forecast (LRF) for the 2026 Southwest Monsoon pegs rainfall at 92% (+-5%) of the Long Period Average (LPA), indicating below-normal rainfall. ICRA noted that the mid-point estimate is the lowest first LRF in at least 25 years, compared to a range of 93%-106% of LPA seen earlier. This marks a sharp reversal from 2025 and 2024, when rainfall was above normal at 108% of LPA.

Below-normal rainfall is expected to affect kharif crop sowing, which depends on monsoon rains between June and September. "Sub-par rainfall is expected to weigh on sowing of kharif crops, and consequently, agricultural output, farm cash flows and food prices." ICRA said. It may also limit reservoir replenishment, as water levels typically decline before the monsoon and recover during the season.

Global weather agencies have indicated a 62% probability of El Nino developing between June and August 2026. El Nino conditions are usually associated with weaker monsoon rainfall in India. "Regardless of intensity level, the materialisation of El Nino could weigh on the rainfall during Southwest Monsoon season in India, posing risks to crop yields and output," ICRA said.

Fertilizer availability for the upcoming kharif season is another concern. The ongoing West Asia conflict may disrupt supply chains, affecting both raw materials and finished products. ICRA said this could pose challenges for domestic production and require alternative sourcing to meet demand.

The agency has flagged downside risks to its FY2027 agriculture Gross Value Added (GVA) growth forecast of 3.0%. It also expects consumer price inflation (CPI) to exceed 4.5%, driven by potential increases in food prices. While rural demand may remain supported in the first quarter of FY2027 due to rabi harvest cash flows, the outlook beyond that will depend on monsoon performance.

However, higher reservoir levels offer some support. As of April 2, 2026, all-India reservoir storage stood at 47% of live capacity, compared to 40% last year and a 10-year average of 37%. ICRA said this provides some cushion against weak monsoon conditions, with storage levels above historical trends in most regions except parts of eastern and southern India.

The report highlighted that reasonable increases in minimum support prices (MSPs) for kharif crops will be important to sustain farm sentiment. It added that even with lower overall rainfall, a well-distributed monsoon could help limit damage.

ICRA warned that a combination of below-normal rainfall, El Nino conditions, and fertilizer supply disruptions could pose significant risks to agricultural output, food inflation, and rural demand in FY2027. The extent of the impact will depend on monsoon trends and geopolitical developments in the coming months.

- ANI

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Reader Comments

P
Priyanka N
The reservoir levels being above average is the only silver lining here. We need to focus on water conservation and efficient irrigation more than ever. Drip irrigation should be heavily subsidized this year.
R
Robert G
Reading this from an international perspective. India's agricultural challenges have global implications for food security. The El Nino factor is a global concern. Hoping for a well-distributed monsoon despite the forecasts.
A
Aman W
Food prices are going to hit the common man hard if this plays out. Inflation is already a pain point. The authorities need a solid contingency plan for essential commodities like pulses and onions.
K
Kavitha C
While the report is concerning, I feel we often panic with early forecasts. The monsoon is unpredictable. Let's hope for the best and prepare for the worst. Our farmers are resilient.
D
Daniel Q
The geopolitical angle with the West Asia conflict affecting fertilizer supply is a stark reminder of how interconnected global stability is with something as local as a farmer's field in India. Complex times.
V
Vikram M
Respectfully, reports like these sometimes create unnecessary fear. We have buffer stocks and the government has managed difficult monsoons before. The focus should be on actionable steps, not just alarming headlines.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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