The IMD’s first stage long range forecast (LRF) for the 2026 Southwest (SW) Monsoon season has indicated below-normal rainfall at 92% +/- 5% of Long Period Average (LPA). The mid-point estimate provided for 2026 is the lowest first LRF in at least 25 years (min/max: 93%/106% of LPA). The possibility of sub-par rainfall in 2026 coincides with likely development of El Nino conditions during the Monsoon season, which has adverse implications for agricultural output irrespective of intensity level, as per ICRA’s assessment. Additionally, the below-normal monsoon is expected to weigh on kharif sowing, output and food prices, as well as limit the prospects for adequate replenishment of reservoir storage. Overall, ICRA foresees downside risks to its FY2027 agri-GVA growth forecast of 3.0%, while the average CPI inflation for the fiscal is set to exceed 4.5%.

EXHIBIT: Reservoir storage levels as percentage of Live Capacity at Full Reservoir Level (FRL)