India’s Inflation Eases Amid Strong Monsoon and Crop Surplus
India’s consumer price index (CPI) inflation in June 2025 fell to 2.1% year-on-year. This rate is lower than the United States’ 2.7% and the United Kingdom’s 3.6%. Food inflation in India even turned negative at -1.1%, contrasting with rises of 3% in the US and 4.5% in the UK. This decline is the lowest since January 2019, providing relief to the Reserve Bank of India (RBI), which had struggled to control inflation in the past year. The easing is mainly due to a bumper crop harvest following a surplus monsoon season in 2024.
Impact of the 2024 Monsoon on Agriculture
The 2024 monsoon delivered 7.6% above-average rainfall. This helped replenish soil moisture, groundwater and reservoirs. Wheat production benefited the most. Government wheat stocks rose to 358.78 lakh tonnes by July 2025, a four-year high. Combined with record rice stocks, India has ample cereals. This supports the public distribution system and helps stabilise market prices.
Crop Sowing Trends in 2025
The monsoon arrived early on 24 May 2025 and maintained above-average rainfall through July. Most states received more rain than usual. This encouraged increased sowing of kharif crops compared to 2024. Exceptions include arhar, soyabean and cotton. Lower prices and pest attacks caused reduced planting in these crops. Farmers shifted some arhar and soyabean area to maize, which is profitable due to its use in fuel ethanol and animal feed.
Role of Imports in Food Supply
Despite reduced sowing of some pulses, inflationary impact is minimal due to imports. India imported record quantities of pulses and vegetable oils in 2024-25. The government has kept import duties low or zero on key pulses until March 2026. Edible oil import duties were cut in May 2025. These measures help keep food prices in check.
Concerns Over Fertiliser Supply
Fertiliser stocks have declined. Urea and di-ammonium phosphate (DAP) stocks on 1 July 2025 were below last year’s levels. Imports fell, especially from China, due to export restrictions. This caused a rise in fertiliser prices. The reduced availability could affect crop yields if shortages persist. The monsoon’s continuation and fertiliser supply remain key uncertainties for agriculture.
Monsoon Outlook and Crop Growth
Although the monsoon began well, any prolonged dry spells could harm crop growth. The early rains helped kharif sowing. However, vegetative growth stages are sensitive to water stress. Continued monitoring of rainfall and fertiliser availability is vital for sustaining agricultural output and controlling inflation.
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