India's early monsoon relief comes with a price tag — and it's rising

The early onset of the southwest monsoon, the earliest the season has begun in the country since 2009, has brought welcome relief from India's summer heat, but it may soon pinch consumers where it hurts the most: their wallets.

From rising onion prices to disruptions in supply chains, the heavy downpour is threatening to undo the recent gains in inflation control. Moreover, the FMCG companies are also in a spot of bother as ample rains dried up their summer product sales.

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The India Meteorological Department (IMD) has updated its forecast for the 2025 monsoon season, now predicting above-normal rainfall. The agency raised its projection for the four-month monsoon period to 106% of the long-term average, up from last month’s estimate of 105%.

For June specifically, the IMD expects rainfall to be significantly above normal, with average precipitation likely exceeding 108% nationwide.

The IMD anticipates a temporary pause in the monsoon’s progress during June, forecasting a slowdown in the monsoon’s northward movement and rainfall levels after the first 3 to 4 days, according to Mrutyunjay Mohapatra, Director General Meteorology, IMD.

While Mumbai has already seen a cloudburst and even a red alert, IMD forecasts continued heavy to very heavy rainfall along the west coast, including Kerala, Karnataka, Maharashtra, and Goa, till June 1. Conditions are favourable for further monsoon advancement into more parts of Maharashtra, Telangana, Andhra Pradesh, and the North Bay of Bengal.

Monsoon vs. Inflation

The Reserve Bank of India ( RBI), which had slashed the policy repo rate to 6% in April 2025, may now be in a bind. In its April policy statement, the central bank had noted that inflation, especially food inflation, had dropped more than expected, supported by a strong rabi harvest, record wheat output, and softening global prices. CPI inflation fell to a six-year low of 3.16% in April from 3.34% in March, and food inflation dropped to 1.78%.

However, the early monsoon could turn out to be a threat for this trend.

Damage to crops in key agricultural regions like Maharashtra, which is India’s onion belt, has already raised alarm bells. The state has now reported crop damage across a total of 34,842 hectares, up from 31,889 hectares earlier, due to relentless rain in districts like Amravati, Jalgaon, Buldhana and Ahilyanagar.

Nashik alone has suffered losses of over 3,230 hectares, while Solapur and Pune have seen destruction across 1,252 and 676 hectares, respectively. Banana, mango, onion, lemon, and vegetable crops have been especially hit, with standing crops and even orchard trees uprooted by heavy winds and waterlogging.

Onions, thalis and the common man
Onions, tomatoes, and potatoes, staples in Indian households, make up 37% of a vegetarian thali’s cost, according to rating agency CRISIL. In April 2025, the average cost of a vegetarian thali was Rs 26.3, a 4% decrease compared to the previous year, and any disruption to vegetable supply could push this up.

In October last year, onion prices jumped 46% year-on-year, and potatoes 51%, due to heavy rain disrupting supply. CRISIL had reported a 20% rise in thali prices then. Tomatoes nearly doubled, from Rs 29/kg to Rs 64/kg, due to September crop damage.

As of May 20, 2025, onion prices at Lasalgaon—India’s largest wholesale market for the crop, stood at Rs 1,150 per quintal. With transportation and storage affected by rains, prices are expected to climb further.

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Tomato prices, which were Rs 5/kg wholesale in Pune just days ago, have now surged to ₹20–₹25 due to reduced arrivals. APMC officials report a 50% drop in vegetable supply, with farmers struggling to harvest or transport produce amid ongoing rains.

An ET report citing Agmarknet data said, tomato prices have risen by 10% to 25% across Maharashtra, Gujarat, Karnataka and Andhra Pradesh in the last week. Leafy greens like spinach, methi, and coriander have also gone up by 12% to 16%.

Macroeconomic implications
The economic implications are likely to be serious. In 2024, monsoon disruptions led to a spike in food inflation, pushing the Consumer Food Price Index ( CFPI) to a 57-month high of 10.87% in October. This surge was driven by delayed sowing and flooding in key states. Vegetable prices alone rose by 28%, while cereals and pulses increased 8–17%.

Meanwhile, the broader Consumer Price Index (CPI), which includes non-food items, rose to 6.21%. Export bans on rice and onions, intended to stabilise domestic prices, ended up hurting farmers.

If food prices spike again, it could derail RBI’s projection of 4% CPI inflation for FY26. The Monetary Policy Committee is scheduled to meet on June 4, with a decision expected on June 6. Another 25 basis point rate cut was widely anticipated to support growth, but renewed inflation risks could force the RBI to pause.

India’s real GDP growth for FY26 is projected at 6.5% by the RBI, and 6.2% by the IMF. But erratic weather, worsened by climate change, could pose a major hurdle.

The kharif season faces setbacks
As per TOI, experts warn that the early rains have also jeopardised preparations for the kharif sowing season. Farmers typically need a dry window of 15–20 days to prepare land for planting. This year, pre-monsoon showers began in early May and haven’t let up, leaving the soil too wet for tractor operations.

“The soil needs to be in a 'wapsa' condition, moist but not saturated, to be workable,” said Kailas Dakhore, agro-meteorologist at Vasantrao Naik Marathwada Agricultural University told TOI. “Without this, sowing becomes nearly impossible.”

Farmers in districts like Indapur, Baramati and Junnar in Maharashtra also report farmland erosion due to heavy water flow. Stored onions are at risk of rotting due to high moisture levels, further threatening supply.

“We expect prices of all vegetables to rise significantly in the coming weeks,” said Shriram Gadhave, president of the All India Vegetable Growers Association, speaking to TOI. “This year’s damage is worse than previous years.”

In Akola, farmer Achyut Mangte Patil reported that about 300–400 acres of onions and jowar have been damaged in a village of 3,000 acres. “Supply shortages will soon push up prices,” he warned.

Meanwhile, principal scientist H.C. Prasanna from the Indian Institute of Horticultural Research added that excess rainfall during the vegetative growth phase hampers root growth and nutrient uptake, threatening overall productivity, as per ET.

The monsoon remains a double-edged sword. Timely rain is essential for agriculture and rural income, but when it arrives early or intensely, it can trigger a domino effect across the economy.