India has recorded deficient rains in the Southwest (SW) Monsoon season so far, with volume of rainfall at 86% of long period average (LPA) during June-August 2026. After a brief pickup in July 2026 (103% of LPA), rainfall momentum weakened in August 2026 (84% of LPA), undershooting the India Meteorological Department’s (IMD’s) forecast (<94% of LPA) for the month. If the actual rainfall in September 2026 turns out to be 90% of the LPA (similar to IMD’s forecast of <91% of LPA), the entire season rainfall (June-September) in 2026 would remain deficient at 87% of the LPA. While ICRA maintains its forecast of a modest 1-2% YoY decline in the final kharif acreage in 2026, higher-than-normal temperatures and El Nino conditions pose risks for moisture levels and thus crop yields. Besides, the dip in reservoir storage especially in northern and southern parts of the country could have a bearing on the upcoming rabi sowing season. Overall, ICRA projects agri GVA to grow by a tepid 1.3% in FY2027, supported by the non-crop sector, albeit lower than 3.3% in FY2026. Besides, if the ongoing decline in real rural wages and sentiments sustains, it would weigh on rural demand in H2 FY2027.

• Monsoon remained deficient at 86% of LPA during June-August 2026: India has witnessed deficient SW Monsoon rains, at 86% of LPA, during June-August 2026, amid an uneven spatial distribution, owing to the development of El Nino conditions. After a large deficit in June 2026 (40% below LPA), rainfall picked up in July (3% above LPA), before turning deficient again in August 2026 (16% below LPA). If the actual rainfall in September 2026 turns out to be 90% of the LPA (closer to IMD’s forecast of <91% of LPA), the entire season rainfall (June-September) in 2026 appears likely to stay deficient at 87% of the LPA.

• Kharif sowing in 2026 to trail last year level by 1-2%; concerns remain for yields: The all-India kharif sowing trailed the year-ago level by a mild 1.7% as on August 28, 2026, benefitting from reasonable pickup in acreage in July (+4% YoY; June: -23%) post surplus rains. Moreover, the momentum in sowing continued in August (+4.5% YoY) despite the rainfall deficit in the month. ICRA maintains its forecast of a modest 1-2% YoY decline in the final kharif acreage in 2026. That said, higher-than-normal temperatures and El Nino conditions continue to pose risks for moisture levels and thus crop yields.

On a pan-India basis, rainfall between 96% and 104% of the LPA is considered to be normal. The other classifications are deficient (below 90% of LPA), below-normal (90-96% of LPA), above-normal (104-110% of LPA) and excess (more than 110% of LPA); Source: IMD; CEIC; ICRA Research