With 2026 declared an El Niño year, all eyes are on the progress of the monsoon across the Indian subcontinent. June ended with rainfall about 40% below the long-term average. July, the most crucial month for kharif sowing, brought a sharp improvement, narrowing the deficit to 16%.
Although El Niño years have often coincided with lower output of key crops, other atmospheric factors also influence agricultural outcomes. More importantly, over-indexing on El Niño risks overlooking longer-term structural challenges facing Indian agriculture, including climate change, rising pest resistance and gradual soil degradation.
July catchup
Indian agriculture has two cropping seasons: kharif and rabi. The kharif season runs from June to October and depends heavily on monsoon rainfall for irrigation. Most kharif sowing takes place during June and July.
As on 31 July, the latest government data available, the area sown by farmers for the 2026 kharif season was about 2.9% less than in the 2025 kharif season, with coarse cereals and pulses registering the largest drops.
This is a sharp improvement from early July when the year-on-year drop was about 20%. Thus, the catching up of sowing progress augurs well for kharif prospects, as July is the key month for sowing. Although the current status of sowing is markedly better at an all-India level, the overall number conceals wide regional variations.
Among larger states, for instance, Karnataka has sown 28% less area than it did in 2025 and Odisha about 16%. Other large states with weak sowing strength are Tamil Nadu (-23%) and Maharashtra (-8%). Large states doing well are led by Bihar (up 10%), Kerala (up 20%) and Jharkhand (up 28%).
El Niño impact
The latest forecast from the India Meteorological Department (IMD) is that the monsoon this year will be 10% below its long-term average. The major reason is the El Niño phenomenon, with the global consensus being that El Niño conditions in the Pacific will last well into next year.
A recent report by CareEdge Ratings outlines the impact an El Niño year has on the monsoon and, equally importantly, on agricultural and GDP growth.
“Of the 23 years since 1951-52 in which agricultural gross value added (GVA) declined, 13 occurred during El Niño years,” the report said. Overall, GVA growth was also lower in El Niño years than in non-El Niño years, it added.
The report also finds that the impact of rainfall variability on overall growth has weakened over the years. This is to be expected given that the share of agriculture in India’s GDP has fallen sharply from 53% in 1950-51 to 17% in 2025-26. In addition, irrigated area has also expanded, from 17% in 1950-51 to 50% in 2023-24, according to CareEdge.
Crop variations
Even the impact of El Niño on individual crops is highly variable. We examined the median annual change in production in El Niño vs Non-El Niño years since 1967. Major crop categories like rice, oilseeds, pulses and cotton show a distinct decline in physical production.
Conversely, sugarcane is an outlier, with a muted impact from an El Niño year. An important reason for such variance is the irrigation coverage. About 94% of the crop area under sugarcane is under irrigation. Compare this with cotton, another water-intensive crop, where only 33% is under irrigation.
The higher dependence on rainfall for cotton has dramatic effects in El Niño years. During weak El Niño years, cotton production falls 2%, with the decline worsening to 13% in strong El Niño years. But cotton is also a good example of a crop where the main problem is not necessarily El Niño. Over the last few years, cotton production has plateaued as farmers have shifted area earlier under cotton to other crops due to factors such as rising pest resistance and stagnating yields.
State resilience
Although the impact of El Niño on the Indian economy has become more muted over time, due to a shrinkage in the overall importance of the agricultural sector, it can still be substantial.
The CareEdge report develops an index on state-wise resilience to poor monsoons based on multiple factors: irrigation coverage, share of agriculture in state GDP, share of water-intensive crops such as rice or sugarcane in overall kharif output, and reservoir levels, among other metrics.
Odisha, Chhattisgarh and Madhya Pradesh are more vulnerable to shocks—the lower the score, the less resilient a state is on this front.
The CareEdge report says that Odisha and Chhattisgarh are squeezed between having low irrigated area compared with other states, and high dependence on water-intensive kharif crops.
“Uttar Pradesh, despite better irrigation coverage, remains vulnerable due to its heavy skew toward water-intensive crops and a lower share of non-crop agricultural activities,” it said, adding that Gujarat, Telangana, Haryana, and Rajasthan, on the other hand, were the major states that appeared better positioned to handle such disruptions.
Import dependency
The other major impact of a weak monsoon, and resulting shortfalls in agri production, is on the current account. Already three major crops—vegetable oils, pulses and raw cotton—have seen their imports rise in recent years. In a year where domestic production falls short of requirements to a greater degree, India will almost certainly become more dependent on imports of such commodities.
A recent report by Reuters, for instance, says that imports of edible oil are expected to increase to an average of 1.5 million tonnes a month between July and October, as compared with 1.3 million tonnes in previous months. In structural terms, India already imports the bulk of its edible oil demand, irrespective of whether a year has weak monsoons or not.
The story is similar for cotton, which has seen dramatic jumps in imports in recent years. Again, the problem is hardly just weak monsoons or El Niño. Productivity has stagnated, and farmers have shifted to other crops.
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