CareEdge warns of an 84% probability of below-normal or deficient rainfall this monsoon season, though stronger reservoirs, foodgrain stocks and irrigation coverage could help cushion the economic impact.
Mumbai : India may be heading towards a below-normal monsoon season amid growing signs of El Niño conditions, raising concerns over agricultural output, rural demand and food inflation. However, stronger reservoir levels, record foodgrain stocks and improved irrigation coverage could help cushion the overall economic impact, according to a new report released by CareEdge Ratings.
The report, titled “El Niño 2026 – Is India Ready?”, points to a heightened risk of rainfall deficiency during the June-September southwest monsoon season. The India Meteorological Department (IMD) has revised its monsoon forecast to 90 per cent of the Long Period Average (LPA), down from the earlier projection of 92 per cent, indicating a below-normal monsoon across much of the country.
More significantly, the probability distribution of rainfall is heavily skewed towards deficient conditions. According to the report, there is a 60 per cent probability of deficient rainfall and a further 24 per cent probability of below-normal rainfall, implying an overall 84 percent likelihood of sub-normal monsoon conditions.
El Niño Signals Strengthen
The report notes that sea surface temperatures and global climate indicators suggest the formation of El Niño conditions during the monsoon season. Data from the US National Oceanic and Atmospheric Administration (NOAA) indicates a significant possibility of at least a moderate-strength El Niño developing over the coming months.
Historically, El Niño events have often coincided with weaker monsoons. Since 1951, India has experienced 25 El Niño episodes. In 12 out of 16 moderate or stronger El Niño events, rainfall was either below normal or deficient, underscoring the climate phenomenon’s influence on India’s monsoon performance.
Agriculture Remains Vulnerable
While India’s economy has diversified significantly over the past several decades, agriculture remains vulnerable to rainfall shocks. The report highlights that 57 per cent of years in which agricultural Gross Value Added (GVA) contracted coincided with El Niño events. Average agricultural growth during El Niño years stood at minus 1.1 per cent compared with positive growth of 4.7 per cent during non-El Niño years. Overall economic growth also tends to slow during El Niño years.
Lower rainfall could affect crop output, farm incomes and rural consumption, potentially creating upward pressure on food prices. Vegetables such as tomatoes, onions and potatoes, along with pulses, are likely to remain particularly vulnerable to weather-related disruptions.
Why India Is Better Prepared This Time
Despite the risks, CareEdge believes India is better positioned to handle a poor monsoon than during previous El Niño episodes. The report points out that reservoir levels as of May 2026 are higher than those recorded during several recent El Niño years. At the same time, wheat and rice stocks remain at historically comfortable levels, providing a buffer against possible supply disruptions and helping contain inflationary pressures.
Structural changes in the economy have also reduced monsoon dependence. Agriculture’s share in India’s Gross Value Added has declined from more than 53 per cent in the early 1950s to less than 17 per cent today, while the services sector now accounts for nearly 55 per cent of the economy. Irrigation coverage has also expanded significantly over the decades, reducing dependence on rainfall alone.
Maharashtra In Middle Of Resilience Rankings
The report’s newly developed State-wise Poor Monsoon Resilience Index (SPMRI) reveals significant differences in preparedness across states. Odisha, Chhattisgarh, Madhya Pradesh and Uttar Pradesh emerge as the most vulnerable states due to lower irrigation coverage, dependence on water-intensive crops and higher exposure to rainfall variability.
Maharashtra receives a resilience score of 48.5, placing it in the middle of the national rankings. The state performs better than several eastern and central Indian states but trails more resilient states such as Rajasthan, Haryana, Telangana and Gujarat.
The findings suggest that while Maharashtra may be better equipped than some rain-dependent states, localised disruptions cannot be ruled out, particularly in drought-prone regions such as Marathwada, Vidarbha and parts of North Maharashtra where rainfall variability continues to influence agricultural outcomes.
Localised Risks Remain
The report concludes that the overall impact of El Niño on India’s economy is likely to remain manageable due to stronger infrastructure, higher irrigation coverage, larger foodgrain stocks and government contingency planning. However, regional disparities remain significant, and localised disruptions in agriculture, water availability and food prices cannot be ruled out if rainfall falls substantially below normal levels.
As the monsoon progresses over the coming weeks, policymakers, farmers and markets will closely monitor rainfall patterns, reservoir levels and inflation trends for signs of stress in vulnerable regions.
