ARS Insights, May 2026. Practical research thinking for business owners, in plain language.
1. The monsoon forecast was cut
The India Meteorological Department lowered its 2026 seasonal rainfall forecast to 90% of the Long Period Average, from 92% in April, and put an 84% probability on below-normal or deficient rain. El Niño conditions are very likely to emerge. About 45% of India’s net sown area has no irrigation and depends on rain. Retail inflation was 3.48% in April 2026, but some economists warn it could approach 5.5% if rain is deficient and food prices rise. The government exempted cotton imports from customs duty and a cess from 1 June to 31 October 2026.
2. Why a business should care
Why it matters: Rural incomes follow farm output, so a weak monsoon can slow sales of two-wheelers, fertiliser, FMCG packs and durables in villages and small towns. Food prices can also squeeze every household’s budget.
What to measure: the share of your sales that comes from rural and small-town customers, your stock levels for the next two quarters, and how your sales moved in earlier weak-rain years.
3. One question for your business this month
If rural sales fell 10% for two quarters, which costs could you cut first, and which customers must you protect?
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ARS Market Research Services Pvt. Ltd., Chennai. arsmrs.in
Sources: Kotak Neo analysis of the monsoon 2026 forecast, citing India Meteorological Department data.