Weak Southwest Monsoon and El Niño Pose Risks to India's Economic Growth
Weak Southwest Monsoon and El Niño Pose Risks to India's Economic Growth
India · Published Oct 7, 2026
• The Reserve Bank of India (RBI) has raised its real GDP growth forecast for the financial year 2026-27 to 7.1%, despite challenges posed by a deficient and uneven Southwest monsoon.
• Kharif sowing was slightly above normal levels but marginally lower than the previous year.

Impact & Risks

The weak Southwest monsoon and strong El Niño conditions are expected to affect agricultural output, particularly the rabi season, which could dampen rural demand. Global economic uncertainties, including geopolitical tensions and elevated oil prices, may further strain India's economic growth. Prolonged supply disruptions could lead to higher domestic inflation through increased fuel costs. Additionally, sectors such as non-durable goods and domestic air passenger traffic have shown signs of weakness, which could impact overall economic momentum. The RBI estimates that a 100-basis-point decline in global growth could reduce India's growth by approximately 30 basis points.

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