According to the global financial services major, India is likely to clock a GDP growth of 5.6 per cent in FY15, provided there is normal monsoon and agri growth.
However, a "weak" or "bad" monsoon could lead to flattish or negative agri growth, lowering GDP to 5.1 per cent or 4.7 per cent, respectively, Citigroup said.
"While admittedly trends in the SOI are volatile, given that a weak monsoon could result in yet another year of sub 5 per cent growth," the report added.
Southern Oscillation Index (SOI) measures the development/intensity of an El Nino.
El Nino (Spanish for 'boy') is a weather phenomenon that occurs every 2 to 7 years and causes major shifts in rainfall. It is characterised by higher surface temperatures in the Tropical Pacific Ocean and weaker trade winds.
El Nino conditions usually coincide with a period of weak monsoon in India. This condition occurs every 4 to 12 years. It had last hit India's monsoon in 2009, leading to worst drought in nearly four decades.
The Indian Meteorological Department (IMD) will be releasing its monsoon estimates on April 15th.
Given that agriculture constitutes around 14 per cent of India's GDP and food is 50 per cent of India's CPI basket, a poor-bad monsoon could shave 50-90 bps from our current GDP estimate of 5.6 per cent, the Citigroup research report says.
The report further said that the current reservoir levels are relatively higher than during the same time in previous years and this could offset El-Nino risks. Moreover, food grains with FCI remain well above the buffer stock norm and agricultural productivity has also been rising.