After witnessing a large deficit in June 2026 (60% of the long period average/LPA), India recorded above-normal rainfall at 103% of LPA in July 2026 as against the India Meteorological Department’s (IMD’s) forecast of <94% of LPA for the month. Boosted by surplus rains in July 2026, the extent of year-on-year (YoY) contraction in kharif sowing narrowed sharply to just ~3% at end-July 2026 from ~23% seen at end-June 2026. Nevertheless, the IMD’s forecast of below normal rains in August 2026 (<94% of LPA) is concerning, as India receives ~29% of its Southwest (SW) Monsoon rainfall in August and ~20% of overall kharif sowing takes place in the month. Kharif sowing in the remainder of the season needs to grow by ~13% to meet last year’s final acreage level, which seems slightly high. We expect the cumulative kharif sowing to dip by 1-2% YoY in 2026, although a better turnout for non-crop segment of agri, would prevent a contraction in agri GVA, as seen in many past El-Nino years. ICRA continues to estimate the GVA of agriculture, forestry and fishing to grow by ~1.2% in FY2027, with risks to the downside.

• Rainfall deficient at 87% of LPA during June-July 2026: India received above normal rainfall at 103% of LPA in July 2026, sharply exceeding the IMD’s forecast (<94% of LPA; below normal). Overall, cumulative rainfall has remained deficient at 87% of LPA during June-July 2026, amid spatial and temporal unevenness. Given this, the rainfall in the entire SW Monsoon season would amount to 90% of LPA, if actual rainfall in August-September turns out to be at 93% of LPA (upper bound of the IMD’s forecast for these months). This is in line with the IMD’s 2nd long range forecast (90% +/-4% of LPA) which was published in May 2026.
• Kharif sowing down 3% YoY at end-July 2026; rainfall in August crucial: Amid a pick-up in rains in July 2026, the acreage under kharif sowing gathered pace, with the YoY contraction narrowing to ~3% as on July 31, 2026 from ~23% as on June 25, 2026. The sowing of crops like pulses and coarse cereals moderated by 6-8% YoY at end-July 2026, while the YoY contraction is relatively mild in the case of rice (-2.2%) and cotton (-2.4%). On the contrary, sugarcane and oilseeds saw YoY rise in their acreage levels at end-July 2026.