Monsoon Predictions Boost Economic Resilience Amid Tariff Pressures

India Ratings and Research highlights the positive economic impact of slightly above-normal monsoon predictions in 2025 by IMD. This forecast, combined with monetary easing, could help the agriculture sector withstand reciprocal tariffs. The focus remains on the spread of rainfall, impacting agricultural growth and consumption demand.

India Ratings and Research (Ind-Ra) announced on Wednesday that the Indian Meteorological Department's (IMD) prediction of slightly above-normal monsoon in 2025 could significantly bolster the farm sector's growth. This development, coupled with monetary easing, may allow India to better endure the adverse effects of reciprocal tariffs.

The IMD predicts that the seasonal rainfall across India is expected to reach 105% of the Long Period Average (LPA), with a variation window of (+/-) 5%. Historically, the LPA for the rainfall season has been pegged at 87 cm for the years spanning 1971 to 2020.

Despite the reduction in agriculture's contribution to the real Gross Value Added (GVA) from 18.5% in FY12 to 14.5% in FY25, it remains a crucial employment driver, highlighting the critical nature of impending monsoon patterns for consumption growth and economic stability.

(With inputs from agencies.)