How El Nino can affect India’s monsoon and your household budget – explained. india news

There was a time when monsoons meant paper boats floating in rain-soaked streets, steaming cups of tea and plates of pakodas and the comforting thought that school could wait another day. For millions of Indians, the rains were a season of nostalgia rather than trepidation. But today, the arrival of monsoon is viewed with a different emotion called anxiety.Delayed or weak monsoon no longer affects only farmers. It affects food prices, electricity bills, income, inflation and even the decisions taken reserve Bank of India. And with scientists warning that El Niño conditions are developing over the Pacific Ocean, concerns are growing that the weather phenomenon could develop into a broader economic challenge.India is facing its toughest monsoon season in more than a decade. The extreme heat has already affected farms, power grids and daily life.Now, with the India Meteorological Department (IMD) forecasting rainfall at only 90 per cent of the long period average (LPA), the country could be facing the first below-normal monsoon in three years and the weakest rainfall since 2015.So what exactly is El Nino? Why does this matter so much for India? And how does a warming ocean thousands of kilometers away affect the household budget in India?

Why does weather matter?

India’s concerns regarding the monsoon have intensified as rainfall has been well below normal and the threat of El Nino remains constant. The southwest monsoon has stalled over southern Maharashtra, leaving large parts of the country with severe rainfall deficit.According to India Meteorological Department (IMD) data, the country received only 42.6 mm rainfall between June 4 and June 18 against the normal of 72.2 mm, resulting in a rainfall deficit of 41 per cent.Central India has been particularly badly affected, with a decline of 67 per cent, while east and north-east India has seen a decline of 42 per cent. The southern peninsula has received 22 percent less rainfall than normal and northwest India has received 6 percent less rainfall than average.The IMD has projected seasonal rainfall at 90 per cent of the long period average, down from its earlier forecast of 92 per cent. Meanwhile, the World Meteorological Organization (WMO) estimates that there is an 80 percent chance of El Nino developing between June and August and a 90 percent chance after that.

According to the Agriculture Ministry, the impact could be relatively severe in twelve states, including Uttar Pradesh and Tamil Nadu. In a country where agriculture still employs about 46 per cent of the workforce, according to the latest Periodic Labor Force Survey, weather is closely linked to economic activity.

What is El Nino?

El Niño is a naturally occurring climate phenomenon in which sea surface temperatures in the central and eastern Pacific Ocean become warmer than normal.Under normal conditions, the trade winds push warm surface waters westward toward Asia and Australia. But during an El Niño event, these winds weaken or reverse, causing warm water to shift eastward and disrupt global atmospheric circulation.This phenomenon is part of the El Niño–Southern Oscillation (ENSO), which has three phases:

El Niño typically occurs every two to seven years and lasts for nine to twelve months. Its effects vary around the world. It could bring drought to Australia, Indonesia and parts of South Asia while causing excessive rainfall in South America and East Africa. However, for India, El Nino has historically meant a weak monsoon.

A familiar but dangerous relationship?

India’s monsoon and El Nino have had a long and uneasy relationship. The Ministry of Earth Sciences says that since 1950, India has seen 16 El Nino years, and seven of them saw below-normal monsoon rainfall.What makes the current situation more worrying is that these natural cycles are unfolding against the backdrop of global warming, extreme temperatures and rainfall variability.Scientists are also discussing the possibility of a “Super El Nino”. According to the US National Oceanic and Atmospheric Administration (NOAA), there is about a one in four chance of a particularly strong event occurring later this year.Dr. Paul Roundy, professor of atmospheric and environmental sciences at the State University of New York at Albany, recently wrote on X that “there is a real possibility of the strongest El Niño event in 140 years.”Similarly, Dr. Andy Hazelton, associate scientist at the University of Miami, said that “all models and observations are pointing in the same direction: there will be a very strong El Niño this year with significant impacts on global climate.”

Why household budget is worried

Inflation fears have shifted from oil to food. According to BNP Paribas, falling crude oil prices have improved the overall inflation outlook, but weather-related disruptions now pose a significant risk.The brokerage said the possibility of a strong El Nino raises concerns over agricultural production and food prices.Reflecting these risks, the Reserve Bank of India has raised its inflation forecast for FY2027 to 5.1 per cent from 4.6 per cent. High commodity prices, falling rupee and rising fuel prices are also likely to increase the pressure.Food inflation has already started increasing. Retail inflation, measured through the consumer price index, rose to 3.9 percent in May from 3.5 percent in April.Vegetables, fruits, edible oils and spices have already become expensive. The prices of tomatoes, chillies and cabbage have increased due to the heat. Onion and potato prices, which often contribute to seasonal increases in inflation, may also face pressure.SBI Research expects tomato prices to increase rapidly due to El Nino. Sachchidanand Shukla, group chief economist at Larsen & Toubro, says prices of food-linked goods are likely to see the biggest increase.“Among tomatoes, onions and potatoes, SBI Research expects tomato prices to rise due to El Nino. No impact has been observed on potato prices, while onion prices continue to trouble the common man even in the event of a normal monsoon year,” he told TOI.

How is farming affected?

Agriculture is often the first victim of a weak monsoon. Nearly half of India’s cultivable land still depends on rainfall, making crop production highly sensitive to weather conditions. Low rainfall reduces soil moisture, delays sowing and affects the productivity of major kharif crops like rice, pulses, cotton and sugarcane. To compensate for the lack of rainfall, farmers are forced to rely more on groundwater, increasing their expenses on electricity and diesel. Low yields combined with high input costs reduce farm incomes and deepen stress in rural areas.Its effect is already visible. According to 360 One Capital Research, the delay in the progress of monsoon has started impacting kharif sowing. As of June 12, the total area sown under kharif crops was 84.6 lakh hectares, 3.9 per cent less than the same period last year. Pulses and cotton have been most affected, their area has declined by 43.2 percent and 28 percent respectively. A notable exception has been rice, whose sowing has increased by 28.4 percent year-on-year, although from a relatively low base.Despite the weak start of monsoon, the level of reservoirs is giving some relief. According to 360 One Capital, live reservoir storage as of June 11 stood at 28.3 percent of total capacity, about 16 percent above the ten-year average. Healthy water reserves could provide an important buffer for irrigation if rainfall remains low in the coming weeks.The research firm said there is a need to closely monitor the progress of monsoon due to its impact on agricultural production, rural income and food inflation.

Much will depend on rainfall during July and August, which form the bulk of India’s seasonal rainfall. An improvement in rainfall during these critical months may support crop production, but prolonged rainfall deficit will put pressure on food prices and impact rural economic activity.The impact of a weak monsoon extends far beyond the agricultural sector. Lower agricultural income reduces spending in villages and small towns, affecting industries dependent on rural demand. BNP Paribas said many rural indicators already showed signs of weakness, with slower tractor sales, lower government spending and rising food inflation hurting sentiment. Data from the Center for Monitoring Indian Economy (CMIE) shows that personal and home care companies recorded an average revenue growth of 8.6 per cent during El Nino years, compared to 12.2 per cent in non-El Nino years. Additionally, warm weather associated with El Nino increases demand for cooling equipment.

Can India handle a weak monsoon better?

Economists believe India is better placed to weather a weak monsoon than it was a decade ago. Agricultural production is less dependent on rainfall due to expanding irrigation coverage and healthy water reserves.According to Aastha Gudwani, chief India economist at Barclays, about 55 percent of India’s gross crop area is now irrigated, up from 40 percent in 2010–11. Reservoir storage levels are also strong, currently about 29 percent above the ten-year average, including abundant rainfall last year.According to Reuters, HSBC economists argue that reservoir levels have become more important for food production and inflation than rainfall alone. However, he warned that rising temperatures could pose a major threat.“We find that the probability of higher temperatures is stronger than the probability of lower rainfall, and the magnitude of the increase in temperatures is increasing during El Nino years,” said Pranjul Bhandari, chief India economist at HSBC.Bhandari said fruits and vegetables are likely to be most vulnerable to extreme heat and erratic weather conditions. While strong irrigation networks and healthy reservoirs have improved India’s resilience, economists say the coming weeks will be crucial.

Summer: The Invisible Economic Shock

Along with lack of rainfall, heatwave is emerging as a major threat. According to the Lancet Countdown on Health and Climate Change, Indians are set to experience an average of 19.8 heatwave days in 2024, the hottest year on record.The study estimates income losses of approximately $194 billion due to heat-related reductions in labor productivity. Outside workers, including farmers, construction workers, delivery workers, street vendors and rickshaw pullers, bear the brunt.Research by Piyush Narang and Ashok Gadgil of the India Energy and Climate Center at the University of California, Berkeley, found that a single day of extreme heat could cause 3,400 additional deaths across the country, while a five-day heat wave could cause about 30,000 deaths.The dairy sector is also worried. Milk prices had already increased by 2-3 percent in May. Industry officials say another increase could happen in July or August if poor rainfall affects fodder availability.

major economic risk

According to NSE, “For 2026, the major challenge is the emergence of El Nino risk.” The exchange noted a 60 per cent chance of deficient rainfall and a 24 per cent chance of below normal rainfall. India’s monsoon and El Nino have had a long and uneasy relationship. Several drought years, including 1987, 2002, 2009, and 2015, coincided with El Niño events, in which poor rainfall damaged crop production and increased food prices. Historically, weak monsoons have disrupted kharif sowing, depleting reservoir levels, impacting rabi production and fueling food inflation, impacting the broader economy.El Nino isn’t just about the warm waters of the Pacific Ocean. For India, it is about the price of tomatoes and milk, cost of electricity, farm income, inflation and economic growth. It affects workers working in the sun and travelers traveling in cities suffering from heat. It shapes RBI’s forecasts and government spending decisions.That is why the progress of rain in July and August will be closely monitored. Because in India, monsoons may still evoke memories of paper boats and evening tea, but in an economy where climate and consumption are intimately linked, every delayed rain now has consequences far beyond the clouds. The story of El Nino this year is not just about the weather. It is about inflation, income and household budget.