Farm sector GVA up 3.5% in Q2, collapses in nominal terms on low inflation

Agriculture was expected to do well and growth at 3.5 per cent is supported by a good kharif harvest expected, which will reflect more in Q3, said Madan Sabnavis

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The gross value added (GVA) in agriculture, forestry and fishing recorded a growth of 3.5 per cent in real terms in the second quarter of FY26, down from 4.1 per cent during the corresponding quarter of the previous fiscal, with nominal growth collapsing steeply, the quarterly GDP estimates released today showed. 

The data showed that in nominal terms, GVA for agriculture and allied activities grew by just 1.8 per cent in the July to September quarter of FY26, down from 7.6 per cent in the corresponding quarter of the previous fiscal, largely due to a sharp dip in food price inflation. 

In the first quarter of FY26, the GVA for agriculture and allied activities in nominal terms was 3.2 per cent, which too was down from 7.5 per cent in the corresponding period of FY25. 

“Agriculture was expected to do well and growth at 3.5 per cent is supported by a good kharif harvest expected, which will reflect more in Q3,” Madan Sabnavis, chief economist at Bank of Baroda, said. 

Earlier, in the day, agriculture secretary Devesh Chaturvedi speaking at a panel discussion on FICCI's 98th Annual General Meeting said that no major spike in food inflation is expected in the next six months on the back of strong kharif harvest and expected bumper rabi production.

 

"Reservoir levels are full, while the soil moisture is also adequate and due to this rabi sowing is progressing well whatever dip in production was seen in kharif due to floods will be more than offset in rabi and we will have a good crop," Chaturvedi said.

 

The July to September quarter is usually the time when the kharif crops are sown and the rabi harvest from the previous season is on its way out.

 

Sowing for kharif crops starts around June with the advent of the monsoon and harvesting starts from October onwards.

 

The GVA data meanwhile also reflects the partial impact of the early kharif harvest.

 

A clearer picture of the farm sector and the impact of the bumper monsoon in 2025 will be felt in the subsequent quarters.

 

The southwest monsoon in 2025 ended the season with eight per cent surplus rains but, more than that, the showers continued across several parts of the country well into the months of October.

 

This not only delayed the kharif harvest but also impacted initial rabi sowing.

 

Meanwhile, the first advance estimate of foodgrains production for the 2025–26 crop season released by the agriculture ministry a few days back showed that India’s rice production in the 2025 kharif season is estimated to be at a record of around 124.50 million tonnes, which is 1.73 million tonnes or 1.4 per cent more than the 2024 kharif season.

 

The crop season runs from July to June.

 

Overall kharif foodgrains production for 2025–26 is estimated to be 173.33 million tonnes, which is around 3.9 million tonnes or 2.3 per cent more than the kharif season of 2024–25.

 

A good kharif production is expected to further keep inflation under check, which has already dropped to multi-year lows, and nudge the Reserve Bank of India (RBI) towards cutting the benchmark interest rates that have been on a pause since June.