A mid-season pause in India’s monsoon has neutralised a 6% July rainfall surplus, but the even spread of rains across key farming belts and strong reservoir levels suggest minimal immediate risk to kharif output or food inflation — provided precipitation recovers as forecast in the second half of August.
Cumulative rainfall stood at par with the long-period average as of Aug. 11, with 59% of the country receiving normal rainfall and 30% recording excess, IDFC FIRST Bank data show. These conditions have kept kharif sowing 5.1% ahead of last year, with paddy acreage surging 16.7% on the back of steady rains in Uttar Pradesh, Punjab and West Bengal, which together form the core of India’s rice production.
The implications for food supply are significant. Ample paddy and coarse cereal sowing should bolster grain stocks, helping contain price pressures even if late-season rainfall remains patchy. Healthy reservoir storage — now at 73% of capacity, 14% above last year and 33% above the 10-year average — offers further insurance for the rabi season, which relies heavily on irrigation.
“Reservoir levels this year are a safety net,” an agricultural economist said. “Even if August ends slightly dry, rabi prospects look secure.”
Inflationary pressures from food are already easing. Headline CPI for July is projected at 1.3% year-on-year versus 2.1% in June, with vegetable and pulse prices falling sharply. IDFC FIRST Bank sees FY26 CPI at 2.7%, well below the RBI’s 3.1% forecast, giving policymakers more room to focus on growth.
Still, the geographic rainfall disparities highlight latent risks. Bihar and Assam, which together produce 7% of India’s food grains, have received deficient rains, potentially hitting local production and incomes. Conversely, excess rainfall in Madhya Pradesh, Rajasthan, Tamil Nadu and Jharkhand could damage pulses and oilseeds, where sowing is already lagging.
Private forecaster Skymet said the monsoon pause was “not unusual” and expected a rebound in the second half of August. The Australian Bureau of Meteorology predicts El Nino-neutral conditions will persist until December, reducing the likelihood of severe weather disruptions.
If the forecast holds, India could end the season with a broadly favourable rainfall pattern, a strong buffer of water reserves and muted food inflation — a combination that would support rural demand and ease pressure on the central bank. A sustained shortfall, however, could reverse some of those gains, tightening supplies and reviving price risks in late 2025.