India to see timely kharif sowing on improved rain forecast by IMD: ICRA

New Delhi [India], May 29 : India is expected to see the timely start to kharif sowing, supported by the India Meteorological Department's (IMD) improved rainfall forecast, according to a recent report by ICRA.

The India Meteorological Department (IMD) raised its rainfall forecast to 106 per cent +/- 4 per cent of the long period average (LPA), up from the initial forecast of 105 per cent +/- 5 per cent of LPA.

This augurs well for the sowing of kharif crops, although an even temporal and spatial distribution is paramount to ensure a favourable increase in crop yields." ICRA said.

"While this would help to replenish reservoir levels, it could prove adverse for standing crops if there is excessive rainfall concentrated during short periods of time."

ICRA currently estimates the agri-GVA growth at 3.5-4.0 per cent in FY2026, following a projected 4.6 per cent expansion in FY2025.

The government has increased the Minimum Support Prices (MSP) for kharif crops for the 2025-26 marketing season, with increases ranging from 1.0 per cent to 13.9 per cent.

According to the report, "Amid increased output of most rabi crops as per FY2025 SAE, the aggregate farm cash flows from the rabi harvest is expected to remain robust. This trend is likely to continue in the upcoming kharif season, given the favourable monsoon outlook."

IMD predicts the overall monsoon to be strong, the spatial distribution will be uneven. South Peninsula and Central India are likely to receive above-normal rainfall, while North-west India is expected to have normal rainfall, and North-east India may experience below-normal rainfall. However, the crucial rain-fed core Monsoon Zone is projected to receive above-normal rainfall.

Despite the positive outlook for most of the country, some parts of the peninsular, North-west, and North-east India may still see below-normal precipitation in June.

The report also highlighted the sectoral impacts of the monsoon. Sectors such as cement, tractors, two-wheelers, edible oils, and sugar are expected to benefit from the above-normal monsoon due to their dependence on agricultural output and rural incomes. Conversely, sectors like power and room air conditioners may see reduced demand growth with higher-than-normal rainfall.

An above-normal monsoon is likely to boost rural demand, which constitutes a significant portion of the overall two-wheeler market.

Two-wheeler domestic volumes had fallen to decadal lows in FY2022 due to Covid-19-led disruptions, fuel inflation and high commodity prices impacting affordability. Rural demand for the two-wheeler industry has improved over the recent past, and its recovery remains key for the industry's prospects.

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