S&P Global Ratings warns that a stronger El Nino will raise weather risks for Asia‑Pacific economies, especially those that rely on agriculture and food imports. The main impact will be seen through weaker farm production, higher food inflation, reduced hydropower generation and increased vegetation fires.
India faces uneven and weaker rainfall as El Nino intensifies. Poor monsoon conditions can hurt crop output, cut water supply and push food prices up. Industries that depend on water may also suffer, and lower reservoir levels could reduce hydropower.
El Nino is caused by unusually warm sea‑surface temperatures in the central and eastern Pacific. This changes global weather patterns and often leads to less rainfall in South and Southeast Asia.
The World Meteorological Organisation said last month that strong El Nino conditions were developing and would intensify between August and October. The event may also bring above‑normal temperatures worldwide.
India has built large food and grain reserves, which can help cushion a weather‑induced supply shock. In July 2026, the country had strong buffers for affected crops, and authorities are coordinating with farmers at the district level to minimise losses.
Governments across the region have also stepped up contingency plans. Measures include better food‑stock management, import planning and keeping domestic markets supplied during disruptions.
Investments in irrigation, reservoirs and water‑management systems have improved many economies’ ability to cope with below‑normal rainfall.
A poor harvest can raise prices of vegetables, grains and other commodities, feeding into overall consumer inflation. For India, where food makes up a large share of household spending, this can influence headline inflation.
The Reserve Bank of India highlighted the risk last week, noting that a weak southwest monsoon amid El Nino could hurt agriculture and rural demand. The RBI projects retail inflation at 5 % for FY27.
Both S&P and the RBI see El Nino as a risk that can be contained through proactive supply management and adequate food reserves, rather than an immediate threat to India’s broader economic outlook.