India’s economy has become significantly less dependent on monsoons than commonly perceived, with expanding irrigation networks and changing cropping patterns insulating agriculture and rural demand from the kind of shocks seen in previous decades, according to brokerage Bernstein.
The brokerage said the traditional narrative that nearly 60 per cent of India’s agriculture depends on monsoon rainfall no longer reflects ground realities, arguing that the country’s relationship with rainfall has undergone a “structural reset”.
“Monsoons aren’t impacting India the way they used to, and the changing dynamics warrant a reset in how we perceive rainfall and its effects,” Bernstein said in a note, Moneycontrol reported.
Historically, deficient monsoons often translated into sharp declines in agricultural output and rural incomes. In 2002, for instance, rainfall fell to 81 per cent of the long-period average, leading to a steep drop in foodgrain production and a severe contraction in rural disposable incomes.
However, that correlation has weakened over the past decade. India continued to register rising foodgrain production despite below-normal monsoons in 2018-19 and 2023-24, the brokerage noted.