The rainfall–food price link: monsoons and inflation

In India, the monsoon isn’t just about rain—it’s about prices. Roughly half the country’s farmland depends entirely on rainfall, which makes the economy unusually vulnerable to weather patterns.

When monsoons fail, crop yields fall, especially for vegetables and pulses. Less supply means higher prices, and since food holds a large weight in India’s Consumer Price Index (CPI), inflation rises. The opposite happens after a good monsoon—bumper harvests push prices down, easing household budgets.

This link between weather and inflation creates a dilemma for policymakers. The Reserve Bank can raise interest rates to cool demand, but it can’t make it rain. Meanwhile, poor rainfall often forces the government to import food or release buffer stocks to control prices.

It’s also why economists say India’s inflation is partly agro-climatic. Unlike advanced economies, where inflation is demand-driven, India’s price swings often come from the sky.

So when clouds gather over the subcontinent, they’re not just bringing rain—they’re setting the tone for grocery bills, farmer incomes, and sometimes even political stability.