Concerns are growing over the potential impact of El Nino on agriculture, consumption, and the economy of India, which is considered the world’s fastest-growing economy and relatively resilient against global headwinds compared to other emerging markets. The India Meteorological Department (IMD) recently reported that there is a nearly 70% chance of El Nino developing during this year’s monsoon season.
To protect farmers, the government has taken steps such as setting up a system for advisory services and forecasts based on different rainfall scenarios for each of India’s districts. However, the IMD revised its assessment on April 11, reducing the probability to 50%.
El Nino’s effects on India include drought, which is a consequence of the global weather pattern known as monsoon disruption caused by warming in the eastern equatorial Pacific Ocean. The IMD’s latest prediction indicates a 70% chance of El Nino during June, July, and August, increasing to 80% for July, August, and September.
To mitigate the potential impact of El Nino, the Union’s agricultural ministry and IMD have been collaborating to develop regional strategies. Customized forecasts are being provided to state governments, enabling them to make preparations in advance. The IMD’s agro-meteorological advisory services and predictions will be distributed through Krishi Vigyan Kendras, a network of agricultural institutes.
India heavily relies on the monsoon, as half of the country’s net-sown acreage lacks irrigation facilities. Rainfall is crucial for replenishing natural reservoirs used for utilities, manufacturing, and municipal water supply.
Historically, El Nino years in India have led to droughts, affecting crop yields and causing inflation due to reduced kharif crop production. Approximately 50% of the country’s yearly food supply comes from the kharif crop. Experts anticipate a mild to moderate intensity El Nino this year.
After a period of La Nina (2020-2022), El Nino is expected to develop in 2023. The positive Indian Ocean Dipole (IOD) is being relied upon by the government to increase rainfall and counter the effects of El Nino.
India’s significant increase in agricultural output has mitigated the impact of droughts. However, droughts still raise prices, reduce agricultural revenues, and negatively impact the overall economy. The central bank predicts that inflation will remain within a narrow range in 2023-24 if the country avoids the effects of El Nino on the southwest monsoon.
The economy indirectly feels the effects of rainfall through reduced consumer spending when crops fail. Rural consumers account for over half of two-wheeler and television purchases, and tepid consumer spending is contributing to the current economic slowdown.
Experts argue that the International Meteorological Organization’s prediction of a typical monsoon, at 96% of the 50-year average rainfall, is on the lower end. The monsoon is considered average if the humidity falls between 96% and 104%. Even a slight deviation from the forecast can lead to below-average monsoon conditions.
The agriculture sector remains crucial to India’s development, and any negative impact on it would reverberate throughout the economy.
