Economic Outlook & Macro Trends

Above-normal SW Monsoon rainfall, healthy kharif sowing, upbeat rabi outlook to augur well for agri-GVA growth

Thematic Report 03 Oct 2025

The all-India rainfall was above normal at 108% of the long period average (LPA) in the Southwest (SW) Monsoon season 2025, in line with the Indian Meteorological Department’s (IMD’s) forecasted range, even as the spatial distribution remained uneven. Aided by the early onset of Monsoon and surplus rains, the cumulative kharif sowing was up by 0.6% year-on-year (YoY) at end-September 2025. However, large excess rains and flooding in some parts of the country in late August 2025 and early-September 2025, coupled with the late withdrawal of Monsoon from some regions pose a concern to the timely harvest and eventual yield of the standing crops. Looking forward, the healthy increase in the minimum support prices (MSPs) for major rabi crops such as wheat, along with elevated reservoir levels augur well for the upcoming rabi sowing season. Overall, ICRA expects the agri GVA growth to print at 3.3% in FY2026 (+4.6% in FY2025 PE). Rural demand is expected to remain healthy, aided by favourable crop outcomes and upbeat outlook, improving consumer sentiments, as well as the likely favourable impact of the GST rate rationalisation. 

  • India received above-normal rains at 108% of LPA in SW Monsoon season 2025: After recording above-normal rainfall at 106% of LPA during June-August 2025, India received excess rainfall at 115% of LPA in September 2025. The spatial distribution was quite uneven during the SW Monsoon season, with rains being in excess in the Central and Northwest India, while the South Peninsula received above-normal rains, and the East and Northeast saw deficient rainfall. 
  • Kharif sowing rose 0.6% YoY as on September 26, 2025: This was led by higher area sown under rice, coarse cereals, sugarcane and pulses, even as oilseeds and cotton witnessed a dip. Despite the early Monsoon onset and abundant rains that supported sowing, large excess rains and flooding in some parts of the country in late-August 2025 and earlySeptember 2025 may have damaged standing crops. This, along with the impact of IMD’s forecast of above-normal rains in October 2025 on the kharif crop yields and harvest remains a key monitorable.
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