- India faces rising inflation risks due to heatwaves, weak monsoon forecasts, and high oil prices
- Temperatures touching 47°C in northern regions have led to record power demand as cooling needs surge
- Forecast of below-normal monsoon rains (June-September) threatens agricultural output
- Inflation expected to rise above 5% in FY27, higher than Reserve Bank of India projection of 4.6%
- Oil prices above $100/barrel (due to global tensions) adding to inflationary pressure
- Weak monsoon may force farmers to rely on diesel-powered irrigation, increasing costs
- Inflation could rise further to ~5.8% if rainfall weakens significantly
- Government has issued advisories to manage heatwave impact and health risks
- Policy impact: RBI may delay rate cuts or even consider tightening & Inflation outlook remains uncertain
- Some cushioning factors: Strong buffer stocks of rice and wheat & Improved irrigation and climate-resilient seeds
- Weather risk persists: ~30% chance of drought-like conditions
- Key concern months: July-August (sowing period)
