Brisk Kharif Sowing Signals Rural Revival; Positive Outlook for Agri-MSMEs

India’s kharif crop season has begun on a promising note, with early monsoon rains driving an impressive increase in sowing across major crops like paddy, pulses, and coarse cereals. For MSMEs operating in the agriculture value chain—especially in farm equipment, agri-inputs, logistics, and food processing—the outlook appears increasingly favourable.

As per the latest data released by the Ministry of Agriculture, the area under kharif crops has reached 59.78 million hectares as of July 11, marking a 6.65% increase over the same period last year. This growth, achieved midway through the sowing cycle, is largely attributed to the early and widespread onset of the southwest monsoon, which has delivered 311.6 millimetres of rainfall since June 1—about 9.5% above the long period average.

Paddy cultivation, the largest component of India’s kharif output, has seen a notable expansion, with sown area rising by more than 10% to 12.36 million hectares. Pulses, including tur, urad, and moong, have recorded a surge of over 25%, reaching 6.7 million hectares. Coarse cereals such as bajra and maize have also gained ground, with their cultivation expanding by 16% to 11.63 million hectares. Though the area under oilseeds has seen a marginal decline, sowing still stands strong at 13.72 million hectares. Sugarcane coverage remains steady at 5.51 million hectares.

The revival of the monsoon since mid-June has played a decisive role in improving reservoir levels across the country. According to the Central Water Commission, India’s 161 major reservoirs are now at nearly 52% of total capacity. This marks a 95% increase over last year’s water levels and an 86% rise above the ten-year average for this time of year. These reserves will be vital not only for kharif crops but also for supporting rabi sowing later in the year.

The Indian Meteorological Department (IMD) has reiterated its forecast of an ‘above normal’ monsoon for the June-September season, projecting rainfall at 106% of the long-period average. Importantly, it has ruled out the occurrence of El Niño conditions during this period, reducing the risk of rainfall disruption and further bolstering farmer confidence.

The government has set an ambitious foodgrain production target of 354.64 million tonnes for the 2025–26 crop year. If current weather and sowing trends hold, this target may even be revised upward in the coming months.

For India’s MSMEs, especially those engaged in agri-processing, farm machinery, input manufacturing, packaging, and rural logistics, these developments signal strong business potential. A good monsoon has always been a cornerstone for rural economic activity. It not only boosts agricultural output but also triggers a ripple effect across consumption-driven sectors—from retail and FMCG to small-scale rural manufacturing.

Moreover, robust kharif performance lays the groundwork for improved rural incomes, which could rejuvenate demand in semi-urban and rural India—a critical market for many MSME products and services. Farm equipment manufacturers, particularly those catering to smallholder farmers with affordable solutions, are also likely to benefit from higher farm activity and liquidity.

As sowing continues through September, market participants will closely watch rainfall distribution during July and August, which are crucial for yield formation. Early signs suggest that 2025 could be a repeat of last year’s strong agricultural output—if not better—laying the foundation for rural-led recovery and growth in India’s broader MSME ecosystem.