India Growth, Inflation & Monsoon Risks (with Haslinda Amin)

India's growth outlook improved as oil prices ease, but weak monsoon poses downside risk to food production and rural consumption. Inflation expected to average ~5% in FY27 driven by food. RBI likely to stand pat. Rupee may benefit from improved balance of payments surplus in near term.

Yields sideways , short term, interviewee implicit

implicit

NDX

RUT

Oil down , short term, interviewee explicit

explicit

Metals

USD up , short term, interviewee implicit

implicit

Nomura 8.0
Investment Bank
Sonal Varma 8.5

India Growth, Inflation & Monsoon Risks (with Haslinda Amin)

dxy

HSBC expects an explosive dollar; stronger dollar is a broader headwind for EM complex.

wti

Oil prices have come down. Every 10% drop in oil price improves the current account balance by 0.4% of GDP.

3 calls

+6

slightly better than random

6/3/2026 9:58:46 AM	short term cautious up	5 days later	-5.20%	-2.60%
3/19/2026 6:07:45 AM	medium term sharp up	20 days later	-0.46%	-0.69%
3/10/2026 3:24:05 PM	short term up	5 days later	+7.16%	+7.16%

Show all 3 wti results

yields

RBI expected to stand pat; core inflation is low; no aggressive rate moves expected.

Haslinda Amin

Energy pressure has eased; how much risk to growth has reversed for India?
Sonal Varma

Downside risk from energy shock has reversed, but weak monsoon and potential contraction in food production is a new downside risk. Upside from lower oil will be offset by monsoon weakness. We maintain 6.6% growth projection for FY27.
Haslinda Amin

What high-frequency indicators are you watching?
Sonal Varma

Supply side: infrastructure activity saw some deterioration from Iran conflict but normalization expected. Demand side: consumer demand (passenger vehicles, tractors) remains resilient despite price increases; exports holding up. Rural consumption outlook is the key risk due to weak monsoon.
Haslinda Amin

How soon will inflation normalize?
Sonal Varma

Inflation has been slow to pick up; last print at 3.9% is below RBI target due to government control of energy prices. As oil cools, food inflation will become the key driver. We expect inflation to average close to 5% in FY27.
Haslinda Amin

What is the worst-case impact of monsoon shortage?
Sonal Varma

Rains in June were 40% below normal; El Niño expected to strengthen. Risk that overall rainfall could be worse than 10% deficiency. Direct impact on food production (rice, pulses, oilseeds) and winter wheat. Food inflation will pick up. Third impact is on rural demand, which has been outperforming urban consumption.
Haslinda Amin

What does this mean for RBI and monetary policy?
Sonal Varma

RBI will stand pat. Oil prices coming down is positive. Core inflation is extremely low (2-2.5%). Unlike 2009, rural wages are not growing in double digits and MSPs are not rising fast, so second-round effects should be muted. RBI has also announced measures to boost balance of payments surplus.
Haslinda Amin

Is the worst over for the Indian rupee? It's down 5% versus USD.
Sonal Varma

Outlook is positive for next 3-4 months. Lower oil improves current account (every 10% drop improves by 0.4% of GDP). FCNRB scheme could bring $55 billion. Balance of payments swinging from $70 billion deficit to $40-45 billion surplus.
Haslinda Amin

HSBC expects an explosive dollar; what are the implications for the rupee?
Sonal Varma

Stronger dollar is a headwind for EM, but FCNRB inflows in August-September could lead to relative outperformance for India. Beyond that, India has substantial FX reserves. The BOP swing in the next 3-4 months will be a bigger driver for India on a relative basis.

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