Monsoon & Food Inflation in India | 25 Apr 2025

Source: TH 

Why in News? 

The  Indian Meteorological Department (IMD) in its first forecast for 2025 has forecasted an above-normal monsoon for 2025 which will support agricultural output and aid the government’s efforts to contain food inflation, which is highly sensitive to rainfall variability. 

What is IMD's Forecast on Monsoons for 2025? 

• Rainfall Prediction:  
  • IMD has forecast an “above normal” southwest monsoon in 2025, with rainfall likely at 105% of the Long Period Average (87 cm), ±5% margin.  
    • IMD classifies monsoon rainfall as: Deficient (<90% of LPA), Below Normal (90–95%), Normal (96–104%), Above Normal (105–110%), and Excess (>110%). 
  • This is backed by neutral El Niño–Southern Oscillation (ENSO) and Indian Ocean Dipole (IOD) conditions and below-normal snow cover over Eurasia, which supports stronger monsoons.  
  • IMD’s forecast accuracy has improved, with average deviation reducing to 2.27% (2021–25) from 7.5% (2017–20). 
• Geographic Distribution:  
  • The IMD forecast predicts below normal rainfall in parts of Jammu & Kashmir, Ladakh, Tamil Nadu, Bihar, and the Northeast. 
  • While, it forcasts normal to above normal rainfall in Madhya Pradesh, Rajasthan, Maharashtra, Odisha, Chhattisgarh, Uttar Pradesh, and West Bengal which form the core monsoon zone (agriculture primarily rain-fed) of the country. 

What is the Impact of Monsoons on Food Inflation in India? 

• Agricultural Yield and Crop Prices: Monsoons impact agricultural output and food prices, but the effect is not always direct.  
  • While good monsoons generally improve yields and lower prices, certain crops may still face price hikes due to production issues. 
  • Over the last 10 years (2015-24), rainfall has been normal or above average in 6 out of 10 years. In years with lower rainfall, such as FY16 and FY19, agricultural growth was weak (at just 0.65% in FY18 and 2.7% in FY24), averaging 4.45% over the decade. 

• Supply Chain Disruptions and Transportation Costs:  
  • Heavy monsoons often disrupt transport and supply chains, raising logistics and storage costs. For example, the 2023 floods in Assam and Bihar delayed staple movement, causing temporary price spikes. 
• Monsoon Deficit and Import Inflation: 
  • Monsoon failure raises import dependency, especially for pulses and edible oils, adding to inflation. In 2023, poor rains led to increased edible oil imports from Indonesia and Malaysia. In 2022-23, India imported 16.5 MT of edible oils, with domestic production fulfilling only 40-45% of the country's requirements. 

What are the Other Key Factors Affecting Food Inflation in India? 

• Supply Shocks: Factors like hoarding and market disruptions also contribute to price hikes, even if rainfall is good. 
• Global Commodity Prices: Rising global prices of key imports like edible oils and pulses raise domestic costs.  
  • India’s dependence on imports makes it vulnerable to global market fluctuations, directly impacting food inflation. 
• Monetary Policy: When the RBI increases interest rates, borrowing becomes costlier for producers.  
  • This raises production costs, especially for packaged foods, leading to higher consumer prices. 
• Government Policies: Changes in Minimum Support Prices (MSPs) support farmers but can raise market prices.  
  • Export restrictions may protect local supply but also disrupt global trade and push up domestic prices. 
• Supply Chain Disruptions: Weak storage infrastructure and transport delays lead to wastage and higher food prices. Efficient logistics are crucial to keeping food inflation under control.

What Steps should India take to Control Food Inflation? 

• Improved Supply Chain Management: Strengthening logistics, storage, and distribution can reduce wastage and ensure a steady food supply.  
  • Using refrigerated trucks for perishables helps minimize spoilage and maintain fresh produce availability. 
• Promoting Agri-Tech for Inflation Control: Encouraging the use of technologies like precision farming, drones, and AI-driven crop management can boost productivity and reduce input costs, helping stabilize food prices. 
  • Techniques like drip irrigation improve productivity in water-scarce areas, while drought-resistant varieties help prevent crop failures during water shortages. 
  • Additionally, tools like AmbiTag help reduce food wastage by monitoring transit temperatures and providing real-time alerts, ensuring better preservation and supply chain efficiency. 
• Agricultural Diversification: Encouraging farmers to grow diverse crops reduces dependence on a few commodities.  
  • Promoting pulses alongside rice and wheat improves soil fertility, provides alternative income, and mitigates risks from fluctuating monsoon conditions. 
• Reforming Food Subsidy Systems 
  • Improving the Public Distribution System (PDS) through better targeting, reduced leakages, and expanded coverage can help ease food inflation. Using technology for transparent and efficient subsidy delivery ensures affordability for the poor without straining fiscal resources. 
• Towards Climate Resilience: Climate-smart practices such as rainwater harvesting, crop rotation, and climate-resilient seeds help farmers adapt to erratic monsoons. A key step in this direction is the release of 109 climate-resilient crop varieties, aimed at stabilizing yields and reducing weather-related losses. 

Conclusion 

A normal monsoon forecast by IMD is positive for India’s kharif harvest, but its effect on food inflation is complex. While good rainfall supports crops, factors like rainfall timing, regional variations, and specific crop vulnerabilities (e.g., pulses, vegetables) influence prices