El Nino, a periodic warming of surface waters in the central and eastern Pacific Ocean, is among the most influential climate phenomena affecting weather patterns across the globe. Occurring every two to seven years, the event weakens trade winds and alters atmospheric circulation, often disrupting rainfall patterns in Asia, the Americas and Australia.
The term El Nino, Spanish for Little Boy or Christ Child, was coined by South American fishermen in the 1600s because the warming typically peaks around Christmas. Scientists say the phenomenon develops when winds that normally push warm Pacific waters toward Asia weaken or reverse, allowing warm water to drift back toward the Americas.
For India, El Nino carries major implications because it tends to weaken the southwest monsoon, the lifeline of the country’s agriculture-dependent economy. Reduced rainfall during El Nino years can trigger droughts, lower crop output and increase pressure on food prices. Historically, India has experienced below-average rainfall in many El Niño years, including 2009, when rainfall dropped to just 78.2 per cent of the long-period average, the lowest in 37 years.
The India Meteorological Department has already forecast below-normal monsoon rainfall at 92 per cent of the long-period average for 2026, while several global climate models suggest a strong El Niño may emerge by mid-year. Experts warn that the event could disrupt rainfall distribution across India, although some southern coastal regions such as Tamil Nadu may receive heavier showers.
The IMF has raised India's FY27 growth forecast to 7% from 6.4%, but warned that converging global risks could weigh on the outlook. IMF Asia and Pacific Department Director Krishna Srinivasan, in an exclusive interview with India Today, said that the prolonged energy shock, a weakening rupee, rising borrowing costs, AI-related uncertainty and El Nino pose challenges. He warned that the energy crisis could worsen, fuelling inflation and slowing growth, and called for energy diversification and greater efficiency. Srinivasan said the rupee should be allowed to adjust to external shocks, while monetary policy should respond if depreciation fuels inflation. He welcomed India's trade deals but stressed the need for reforms to attract investment. He also called for reskilling workers to adapt to AI and cautioned that El Nino could hurt agriculture and growth.
The discussion highlights critical economic challenges facing India and the broader Asian region, ranging from agricultural risks linked to El Niño to mounting currency pressure driven by global energy shocks and capital outflows. In managing currency volatility, allowing the exchange rate to adjust freely serves as a primary line of defense, with foreign exchange interventions reserved for disorderly market conditions or unanchored inflation expectations. Persistent supply threats, particularly around the Strait of Hormuz, coupled with thinning fiscal buffers, limit the ability of governments to shield domestic economies from elevated international oil prices. This scenario underscores the imperative to diversify energy imports and accelerate investments in renewable power. Furthermore, bilateral trade agreements offer critical insulation against global trade fragmentation, with deeper regional integration presenting substantial growth potential. To sustain long-term expansion and attract foreign direct investment, the analysis stresses the urgency of medium-term domestic reforms across factor markets, specifically land and labour, alongside structural improvements in the ease of doing business.
The International Monetary Fund has evaluated the economic trajectory of Asia amid compounding challenges, including energy shocks, artificial intelligence disruptions, and trade uncertainties. While regional economies have shown resilience by diversifying energy imports and advancing trade pacts, escalating fuel prices continue to exert inflationary pressures, requiring central banks to prioritise price stability. Research across nineteen Asian economies indicates that artificial intelligence has reduced labor demand in exposed sectors by ten percent, though demand for specialized technical skills is simultaneously reshaping the workforce rather than causing wholesale job displacement. Significant divergence in technological preparedness exists across countries, underscoring the urgency for digital infrastructure investments and workforce reskilling. Amid widespread global volatility, India's growth projection for the financial year has been upgraded to seven percent, supported by strong economic momentum. However, downside risks persist, including prolonged energy price spikes, potential corrections in the artificial intelligence cycle, rising sovereign debt, tighter borrowing conditions, and climate disruptions stemming from severe weather phenomena like El Niño.
The International Monetary Fund has revised Asia's growth forecast to 4.8 per cent for the current year and 4.4 per cent for next year, reflecting the combined impact of energy shocks, shifting global trade patterns, and artificial intelligence disruption. While Asian economies have demonstrated resilience through diversification and monetary tightening, rising oil and gas prices continue to pose inflationary risks across import-dependent nations. Central banks have been advised to maintain a focus on price stability and preserve agility. On technological change, analysis reveals an initial ten per cent drop in employer demand within artificial intelligence-exposed sectors across nineteen Asian economies, followed by stabilization and increased demand for specialized skills. India's growth projection for fiscal year 2027 has been upgraded to seven per cent, supported by strong economic momentum. However, persistent regional risks remain, including ongoing energy market disruptions, sovereign debt pressures, tightening financial conditions, and climate challenges such as El Niño, alongside the necessity for domestic factor market reforms.
Delhi's air quality slipped into the poor category following Dussehra celebrations, renewing debate over primary pollution sources in the National Capital Region. While political accusations pointed towards stubble burning in Punjab and Haryana, research from the Indian Institute of Technology Delhi shows that firecrackers during festive seasons contribute significantly more to immediate toxic elemental PM2.5 levels than farm fires. Analysis indicates farm fires reached a five-year low, yet toxic air worsened due to fine particles, soot, and metals from fireworks alongside persistent vehicular emissions, industrial discharge, and road dust. Compounding the situation are seasonal meteorological factors, including falling temperatures, weak winds, and an El Niño pattern that limits unseasonal rain and western disturbances, preventing the dispersal of pollutants. In response, authorities have enforced Graded Response Action Plan Stage 1 measures across Delhi NCR, imposing restrictions on coal and wood stoves and mandating water sprinkling and covering of raw materials at construction sites.
In an interview in Hyderabad, Telangana Deputy Chief Minister Mallu Bhatti Vikramarka criticized the misuse of Form 7 to delete opposition voters, stating, "Election Commission, that is their basic duty to create a trust and confidence, uh, that they are running the elections fair and free, which is lacking. So that is where the, the, the very basic question of the democracy is at stake." He condemned the arrest of student activists, asserting that in a parliamentary democracy, governments must listen to public voices. Vikramarka also addressed the Rohith Vemula Act drafting process, confirming an official committee is actively consulting stakeholders, and dismissed BRS criticism regarding El Niño, noting it is a severe natural challenge affecting drinking water and heat across the country.
In an interview, Maharashtra Chief Minister Devendra Fadnavis discussed the governance challenges in the state, political protests, and the Bharatiya Janata Party's evolving communication outreach. Pointing to the drought caused by El Niño affecting 75 percent of the state's crops as Maharashtra's most pressing challenge, Fadnavis maintained that administration remains under his complete control. Commenting on nationwide student and political agitations, he categorized them into genuine grievances and manufactured protests driven by ultra-leftist designs aiming to demonize constitutional institutions, stating, "This is anarchy." Fadnavis highlighted that democratic governance necessitates engagement with all sections of society, including Gen-Z, emphasizing the critical role of social media platforms like Instagram. Addressing speculation about a potential move to central politics in Delhi, Fadnavis firmly asserted that his current focus remains exclusively on serving Maharashtra, reiterating his dedication to the responsibilities assigned to him by party leadership.
Maharashtra faces a severe drought situation driven by El Nino, affecting approximately 75 percent of the state's agricultural land and causing immense crop damage. Planning is currently underway to tackle the impending shortages of drinking water and cattle fodder. Addressing the recurring challenge, the discussion notes that 52 percent of Maharashtra lies permanently in rain-shadow and drought-prone regions despite housing 40 percent of the nation's major dams. The bulletin also highlights historical precedents including the 1972 drought and past relief initiatives like Jalyukt Shivar and farm loan waivers.
Addressing an event in New York, External Affairs Minister S. Jaishankar warned that ongoing conflicts in Ukraine and the Middle East are causing severe disruption across Global South economies. He cautioned that food security, energy supplies, and fertilizer availability face compounding pressures due to geopolitical tensions and adverse weather events such as El Niño. The remarks prompted political debate in India, with the Congress claiming vindication for Lok Sabha Leader of Opposition Rahul Gandhi, who previously cautioned against an impending economic tsunami. The broadcast details the quadruple global shock across food, fuel, fertilizers, and finance, highlighting risks from shipping lane disruptions, export restrictions, and tightening financial conditions. It further breaks down how El Niño threatens monsoon rains, agricultural yields, and irrigation, raising concerns over potential domestic and global price hikes.
Surging crude oil prices triggered cautious market sentiment as Brent crude breached the 100 dollars per barrel mark and India's crude basket reached a four-month high of 108.99 dollars, driving the rupee down and pushing the Nifty index to settle at 23,431 after dropping nearly 200 points. The India VIX surged over six percent while real estate, IT, and financial stocks faced selling pressure, contrastingly balanced by gains in metal indices and Adani Group shares. In corporate developments, Adani Group planned a 2.5 billion dollar debt refinancing alongside a 9,800 crore rupee stake sale by Adani Airports, while the government evaluated a revised offer from Fairfax Financial Holdings for IDBI Bank's strategic disinvestment. Primary market activity accelerated with six initial public offerings opening simultaneously. Additionally, sugar export constraints persisted due to ethanol blending and El Nino risks, bilateral trade discussions between India and the United States continued over tariff structures and market access, commodity projections pointed toward gold reaching two lakh rupees per ten grams, and Apple prepared product updates in Cupertino for the iPhone 18 Pro.
In an exclusive interview, Sanjeev Sanyal, Member of the Economic Advisory Council to the Prime Minister, addressed India's latest GDP growth print of 7.8 percent, stating that the '7.8% GDP growth rate is a very strong one.' Sanyal noted that growth was broad-based across manufacturing, construction, and services sectors, supported by public and private investments. Responding to geopolitical risks and inflation concerns, he highlighted the diversification of energy supplies and noted that unemployment rates continue to drift downward according to official data. Addressing political criticisms over corporate profitability versus household consumption, Sanyal dismissed claims of widespread household distress, pointing to record car sales and robust consumer purchases. He also defended the updated GDP base year methodology, explaining that updating baskets to include newer growth sectors aligns with international best practices and standard statistical norms.
A panel of expert economists examines India's latest economic momentum and gross domestic product growth print. Madan Sabnavis, Chief Economist at Bank of Baroda, notes that the 7.8% growth figure 'was much beyond our own expectations' while highlighting key risks from inflation, kharif crop performance, and private consumption. Madhvi Arora, Chief Economist at Emkay Global, discusses sequential gains, capital expenditure trends in the micro, small, and medium enterprises segment, and central government interventions during the West Asia crisis. Sajid Z. Chinoy, Managing Director and Chief India Economist at JP Morgan, points to cyclical recovery drivers, energy import diversification, and a boost in export competitiveness. Additionally, Subhash Garg, former Finance and Economic Affairs secretary, raises questions regarding the baseline revisions in current prices nominal gross domestic product and analyses the potential necessity of an interest rate hike by the Reserve Bank of India to balance external flows and manage currency differentials.
Indian stock markets experienced downward pressure during morning trade as Nifty traded lower around 24,059. The market weakness was driven by rising geopolitical unrest between the United States and Iran, which raised crude oil prices above 90 dollars per barrel. Precious metals like gold and silver also traded lower on the Multi Commodity Exchange. While stocks such as ONGC, Zomato, and HDFC Bank recorded gains, metal majors and consumer goods stocks faced selling pressure. The market uncertainty was further compounded by leadership changes at HDFC Bank following the chief executive officer deciding not to seek a third term. Additionally, market participants monitored upcoming gross domestic product growth data for the April to June quarter. Meanwhile, the Finance Minister announced in Chicago that the government remains on track to reduce government debt to 50 percent of gross domestic product by 2030 while maintaining fiscal discipline and social welfare expenditure. MSCI index rebalancing also led to trading activity across newly included and excluded stocks.
Sugar prices in India have witnessed a sharp surge from 44 rupees per kilo in May to nearly 65 rupees per kilo, triggering a political slugfest ahead of the festive season. Union Minister Pralhad Joshi stated that global weather damage, El Nino, and red rot disease have impacted sugar production. Despite the price rise, the Centre highlighted that sugarcane output rose to over 5,000 lakh tons in 2025-26, maintaining that domestic sugar supplies remain in surplus. To curb hoarding and speculation, the government announced a 15-day stock limit for bulk consumers using over 10 metric tons monthly, effective from September until November 30. The curbs apply to sweet shops, soft drinks manufacturers, food processors, and confectioneries. Additionally, 10 lakh tons of raw sugar will be imported duty-free, while exports remain restricted. Meanwhile, opposition parties, including the Congress and Aam Aadmi Party, attacked the central government over sugar stocks and sugarcane diversion for ethanol.
Sugar prices in India have witnessed a sharp surge ahead of the festive season, climbing from around 44 rupees per kilo in May to nearly 55 to 65 rupees per kilo by late August, marking a sharp increase of up to 28 percent. The price shock has triggered a major political confrontation, with opposition leaders targeting the government over low sugar stocks and questioning the diversion of sugarcane towards ethanol production under the E20 policy. Critics allege that inflation is burdening the common citizen while sugarcane is being diverted for fuel. In response, the government has attributed the drop in production to red rot disease, El Nino, and rainfall deficits affecting agriculture globally. Official estimates state that despite production falls, domestic requirement stands at 280 lakh metric tons with surplus reserves available. To manage supply pressure and stabilize retail rates ahead of peak demand, measures including stock limits and sugar imports of around 10 lakh metric tons have been permitted.
Indian stock markets opened on a steady note with the Nifty hovering around the 24,285 to 24,290 level, while the Indian rupee traded near 95.64 against the US dollar. Expert market commentary indicated positive momentum driven by easing crude prices and global cues, alongside strong investor appetite in the primary market and upcoming IPOs. Meanwhile, domestic sugar prices witnessed a sharp surge, prompting the central government to initiate measures, including stock limits and temporary raw sugar imports, to ensure domestic availability ahead of the festive season. Union Food and Consumer Affairs Minister Pralhad Joshi stated that water scarcity caused by El Niño conditions and red rot disease impacted agricultural production. Analyst discussions noted that global sugar supply constraints, such as sugarcane diversion for ethanol in Brazil, contribute to the supply pressure. Sectoral movements showed gains across IT, auto, metals, and jewelry stocks, supported by expectations of strong consumer demand during the upcoming festive and wedding seasons.
A sharp rise in sugar prices from ₹48 to between ₹56 and ₹65 per kilo ahead of the festive season has triggered a political war in India. Congress President Mallikarjun Kharge targeted the Modi government over nine-year-low sugar stocks and demanded a review of the E20 ethanol blending policy, accusing the government of indifferent inflation management. Opposing the claims, Union Minister Pralhad Joshi cited red rot disease and El Nino for global agricultural declines while assuring that India maintains a surplus of 20 to 25 lakh tonnes against a 280 lakh tonne demand. In FY 2025-26, around 30 to 35 lakh metric tonnes of sugar was diverted for ethanol production from a gross output of 306 lakh metric tonnes.
Sugar prices have experienced a sharp fifteen point six percent surge in one month, rising from forty-eight rupees to nearly fifty-six rupees per kilogram ahead of the festive season. This price shock has triggered a political clash between opposition and ruling parties over falling sugar stocks and the diversion of sugarcane toward ethanol production under the E20 policy. Concerns have been raised regarding nine-year low sugar reserves and rising inflation affecting essential commodities. The central government attributes the reduced production to global factors, including red rot disease and water scarcity caused by El Nino. To stabilize prices, measures have been introduced, including stock caps, duty-free raw sugar imports, export bans, and physical mill verification checks.
Union Minister Pralhad Joshi addressed the recent increase in sugar prices, attributing reduced agricultural production to unexpected red rot disease and water scarcity caused by El Nino. Speaking on global and domestic agricultural declines, Joshi noted that India's sugar production fell short of the expected 330 to 340 lakh tons. Despite this drop, he assured that India currently holds a surplus of 20 to 25 lakh tons against a requirement of approximately 280 lakh tons. To manage upcoming festival demand, temporary measures including raw sugar imports have been initiated. The minister and government officials dismissed opposition claims blaming the ethanol blending policy for the sugar crisis, emphasizing that environmental factors and rain deficits exceeding ten percent in key producing states like Maharashtra and Uttar Pradesh caused the slowdown.
