India’s monsoon rains were below average for the fourth straight week, with rainfall scanty over central and western parts of the country in the week ended on Wednesday, raising concerns about major crop production and the impact on the nation’s economy.
Monsoon rains are crucial for the country’s farm output and economic growth. About 55% of India’s arable land is rain-fed, and agriculture makes up about 15% of a $2.5 trillion economy that is Asia’s third-biggest.
And India’s economy, which grew at its slowest in more than four years over the January-March quarter, isn’t in any condition to take a big hit from a poor monsoon.
If the rains don’t improve over the next two to three weeks, India could be facing a crisis that hammers crop harvests and rural demand. Companies that sell everything from tractors to fertiliser to consumer goods to farmers would be vulnerable.
“Sowing has already been delayed by three weeks. If the monsoon doesn’t revive in two, three weeks, then the entire season could be wiped out,” said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities in Mumbai.