India Economics Weekly: India Special Report: Growth-inflation mix likely to justify rate hikes in Oct-Dec'26

Research evidence excerpt

India Economics Weekly: India Special Report: Growth-inflation mix likely to justify rate hikes in Oct-Dec'26

Monsoon, Kharif sowing trend and risks to growth-inflation

India's 2026 kharif season has entered a more challenging phase, with delayed and uneven monsoon rains

beginning to translate into weaker sowing activity across several major crops. According to the latest Ministry of

Agriculture data, acreage under key kharif crops as of 10 July remained significantly below year-ago levels,

reflecting the impact of prolonged rainfall deficits across large parts of the country. More than half of India's 741

districts (54%) recorded deficient or large-deficient rainfall between 1 June and 13 July, while only 46%

received normal or above-normal precipitation. Currently, monsoon rainfall is 23% below normal for the country

as whole (was 42% below normal in end-June). The development comes against the backdrop of a

strengthening El Niño episode and a monsoon onset that was delayed in important agricultural states including

Maharashtra, Madhya Pradesh, Chhattisgarh and Gujarat.

The weakness in sowing is most evident in rain-dependent crops. Paddy acreage, the most important

kharif crop from both production and inflation perspectives, stood at 114.7 lakh hectares, down 8.6%yoy from

125.5 lakh hectares a year ago. More concerning is the performance of pulses and oilseeds, where acreage

shortfalls are substantially larger. Pulse sowing was reported at 56.6 lakh hectares (-23.3%yoy), compared with

73.9 lakh hectares last year, while oilseed acreage fell to 117.8 lakh hectares (-21.0%yoy) from 149.2 lakh

hectares. Cotton sowing was down 15.3%yoy, suggesting that the monsoon disruption is affecting a broad

range of crops rather than a single commodity segment.