Despite delays in kharif sowing due to uneven monsoon, the RBI believes food inflation will remain under control because of ample foodgrain stocks and improving supply conditions.
Highlights
- RBI says delayed kharif sowing is likely to have only a limited impact on food inflation.
- Comfortable public foodgrain stocks are expected to cushion any sharp rise in food prices.
- India received 276.8 mm rainfall between June 1 and July 21, about 21% below normal, according to IMD.
- Retail food inflation rose to 5.32% in June, pushing headline CPI inflation to 4.38%, an 18-month high.
- RBI expects improving rural demand and resilient economic activity to support growth.
- Household net financial assets moderated to 6.2% of GDP in FY26, while financial liabilities increased.
The Reserve Bank of India (RBI) has said that delays in kharif crop sowing caused by the uneven progress of the southwest monsoon are unlikely to significantly increase food inflation. According to the RBI’s July Bulletin, adequate public foodgrain stocks should help absorb any temporary supply shocks and keep food prices under control.
The central bank noted that although rainfall has been uneven across several regions, India’s large foodgrain reserves provide an important buffer against inflationary pressures. This is expected to reduce the impact of delayed sowing on the availability of essential food items in the coming months.
According to the India Meteorological Department (IMD), the country received 276.8 mm of rainfall between June 1 and July 21, around 21% below the long-period average. The weather agency has projected seasonal rainfall at about 90% of the long-period average, raising concerns over agricultural output in some regions.
Food inflation, however, has already shown some upward movement. Retail food inflation increased to 5.32% in June from 4.78% in May, pushing overall consumer price inflation (CPI) to 4.38%, its highest level in 18 months.
The RBI also said that India’s economy continues to remain resilient despite global uncertainties such as supply chain disruptions and geopolitical tensions. Improving rural demand and steady urban consumption are expected to support economic growth in the coming quarters.
Separately, the RBI Bulletin showed that household net financial assets moderated to 6.2% of GDP in FY26, as financial liabilities rose during the year. Even so, the central bank believes India’s macroeconomic fundamentals remain strong.
