The southwest monsoon, after a sluggish start, has now picked up pace and has made significant progress over the past week. According to economists, rains have advanced across most regions, narrowing the overall rainfall deficit and triggering early gains in kharif crop sowing and reservoir storage levels.
A well-distributed and timely monsoon is crucial for India’s agriculture-dependent economy, directly influencing food production and prices. With nearly half of India’s farmland reliant on monsoon rains and only about 57 per cent under irrigation, the progress of the monsoon is a key determinant of food inflation.
In fact, earlier, the Reserve Bank of India (RBI) had also expressed optimism that the early and above-normal monsoon forecast for 2025 will help ease food inflation and boost agricultural production. However, an even and timely pour is what will decide the impact of monsoon on inflation.
An improving national rainfall deficit
According to Aastha Gudwani, India Chief Economist, Barclays, as of June 22, the national rainfall deficit has improved to just 1 per cent below the long period average (LPA) as of June 22, from a worrying 31 per cent deficit as recently as on June 15. However, regional variations persist, with large swathes of the country, especially in the east, northeast and parts of the south still experiencing deficient rainfall, while northwestern and central parts of the country report above-normal rains.
Jahnavi Prabhakar, Economist at Bank of Baroda, reiterated that for the period 1 June 2025 to 22 June 2025, southwest monsoon is 1 per cent below LPA compared with last year. She highlighted that out of 36, 24 sub-divisions, that is, 67 per cent of the country, have received normal to excess rainfall during this period, while 11 states are in the deficient zone.
Region-wise, east and northeastern India reported deficient rainfall of -15 per cent, followed by the southern peninsula at -10 per cent. In contrast, central and north western regions reported a rainfall surplus of 8 per cent and 26 per cent.
“Overall cumulative rainfall this year has been higher at 105mm, compared with 88.2 mm last year. However, it is marginally lower than the normal rainfall (106mm) received during this period,” Jahnavi Prabhakar said.
On Sunday, the southwest monsoon covered the entire country, nine days ahead of its normal schedule of July 8, the India Meteorological Department (IMD) said. The IMD has forecast heavy to very heavy rainfall across large parts of Northwest, Central, East, and Northeast India over the next seven days.
Kharif sowing and crop outlook
Now this regional disparity is echoed in kharif crop sowing patterns. As of June 13, the total area sown stood at 8.9 million hectares — a 1.7–1.8 per cent increase over the corresponding period last year. “Kharif sowing typically picks up pace only from July; we will monitor the weekly progress for its likely impact on production,” said Aastha Gudwani.
While sowing usually gathers momentum in July, the early trends, economists said, are encouraging. “Total sown area of rice and pulses has grown by 13.3 per cent and 18.1 per cent respectively. Within pulses, urad and moong bean have registered an increase. Higher acreage has also been noted for oilseeds led by soybean. In contrast, acreage of both cotton and jute and mesta have declined by (-) 0.7 per cent and (-) 3 per cent respectively for the same period,” said Jahnavi Prabhakar.
Reservoir storage status
The improved monsoon performance has helped push up water levels in major reservoirs. Data shared by Barclays and Bank of Baroda from June 18-19 indicated that current storage stood at 32 per cent of total capacity, significantly higher than 21-22 per cent during the same time last year.
Jahnavi Prabhakar said, “Reservoir levels continue to be much higher this year when compared with last year, across all the regions, with the exception of the Northern region (27 per cent). Amongst regions, Southern region has the highest reservoir level (39 per cent), followed by Western (32 per cent) and Central region (29 per cent) along with Eastern region (24 per cent).
How will this fare for inflation and economic growth?
The improved reservoir levels and rainfall are expected to support crop sowing which suggests a positive outlook for food supply, but the persistence of regional deficits remains a risk.
According to analysts and experts, a strong monsoon, if sustained, will not only ease food inflation but also bolster rural demand and support overall economic momentum. Even as global and geopolitical factors could still influence domestic inflation and supply chains, a record kharif production last year and the current favourable sowing trends will provide a buffer against price pressures.
It is worth noting here that India’s retail inflation, based on the Consumer Price Index (CPI), for May stood at 2.82 per cent, down from 3.16 per cent in April, on a significant decline in headline and food inflation during the month.