RBI says agriculture outlook for FY27 hinges on monsoon progress, distribution; El Nino poses risk

The RBI says India's agriculture outlook for FY27 hinges on monsoon progress and distribution, with El Niño posing downside risks. In its Annual Report for 2025-26, the central bank notes persistent weather risks but anticipates gains from better irrigation, technology, and policy support. It adds that the rain-reliant sector has become less vulnerable due to structural improvements, though input prices could rise amid geopolitical tensions. The report also cautions that El Niño could depress output, but late-season Indian Ocean Dipole conditions might offset some adverse effects. Union Budget 2026-27 measures aim to diversify crops, promote high-value varieties, support fisheries and aquaculture, and expand technology use in farming. A key initiative is Bharat-VISTAAR, a multilingual platform that integrates digital infrastructure with AI-based advisory tools. RBI projects India's real GDP growth at 6.9% for 2026-27 and warns that a prolonged West Asia conflict could affect inputs and prices. Overall, the RBI views agriculture and allied sectors as set for strong, sustainable growth backed by policy and technology; this mix of risk and innovation shapes the outlook for farmers across the country.