The India Meteorological Department forecasts a below-normal monsoon for 2026, predicting rainfall at 92% of the long-period average. This comes amid rising farm input costs linked to the ongoing Iran war, which could strain India's rural economy. Economists caution that while strong water reservoir levels may provide some buffer, the combination of weak monsoon and geopolitical tensions could dampen growth prospects. Current estimates suggest that India's GDP growth could slow to between 6.3% and 7% for FY27, down from 7.6% in FY26, particularly if Brent crude oil prices average $80 per barrel. Rural demand is expected to remain robust in the first half of the fiscal year due to improved earnings from a good rabi harvest, but may decline in the second half due to potential El Niño effects and constrained remittances from abroad. The rising rural inflation rate, now at 3.6%, could further challenge consumption patterns, especially in the agricultural sector, which is already facing pressures from supply-side shocks. Economists emphasize the need for supply-side reforms to mitigate these risks and enhance agricultural productivity.