Households are already reeling under the pressure of rising fuel costs, expensive vegetables, higher grocery bills and growing day-to-day expenses. For many families, managing monthly budgets has become harder than before. Now, Zerodha founder and CEO Nithin Kamath has warned that things could become even more difficult in 2026 if two major risks, i.e., a weak monsoon and expensive oil, hit India at the same time.
In a post on X, Kamath flagged concerns around a possible super El Nino, weak rainfall and rising energy costs linked to global tensions. According to him, if food and fuel prices rise together, inflation could become a much bigger challenge for Indian households.
Kamath wrote, “2026 is turning out to be a case of .”
One of the biggest concerns, according to Kamath, is the possible impact of El Nino, a weather pattern that develops when the Pacific Ocean warms more than usual.
This may sound technical, but its impact on India can be significant. Historically, El Nino years have often been linked with weaker monsoons in the country.
Kamath explained, “Every few years, the Pacific Ocean warms up abnormally, and that phenomenon is called El Nino. When it happens, India’s monsoon weakens.”
He added that a strong or “super” El Nino may be developing this year, with forecasts already pointing towards rainfall being lower than normal.
A 6% shortfall in rainfall may not sound alarming at first. But in a country like India, the monsoon affects far more than just farmers.
Nearly 70% of India’s yearly rainfall comes during the monsoon season, while a large section of farmers still rely entirely on rain for agriculture. Poor rainfall can reduce crop output, affect food supply and eventually push up prices at local markets.
Kamath pointed to history to explain why this matters. “In 60% of El Nino years since 1951, India has seen below-average rain. In 2009, rainfall fell to just 78% of normal, the worst in 37 years.”
The bigger worry? Higher food inflation.
“A weak monsoon means weaker harvests, and weaker harvests mean higher food prices and higher inflation. Food is one of the biggest expenses in a household budget,” Kamath said.
For households already struggling with rising living costs, this could mean spending even more on essentials such as vegetables, grains and cooking staples.
Kamath also highlighted concerns over rising global energy prices.
He pointed to tensions involving Iran and disruptions around the Strait of Hormuz, a key global oil and gas shipping route. Any disruption there tends to affect fuel prices globally, especially for countries like India that import most of their energy needs.
In his words, “Trump’s war with Iran has effectively shut a channel that carries 20% of the world’s oil and 20% of its LNG.”
India imports a large share of its oil and gas, which means any rise in international prices often translates into higher fuel costs at home.
Kamath said,“India imports 80 to 90% of its oil and 40 to 50% of its gas.”
Higher crude oil prices not only affect petrol and diesel rates but also increase transport and logistics costs, eventually making everyday goods more expensive.
If food and fuel inflation rise together, the pressure may not stop at household budgets.
Kamath believes the Reserve Bank of India (RBI) may eventually have to step in. “When food and energy prices rise together, the RBI cannot stay quiet.”
Higher inflation often forces central banks to tighten monetary policy, which can lead to interest rate hikes. That may make loans, including home loans, vehicle loans and business loans costlier.
Kamath warned, “Beyond a point, it will have to start hiking rates, and that is when a bad situation starts to feel like a crisis.”
Even with these concerns, Kamath ended his message with a reminder that it is still early days. “It’s still May.”
In other words, much will depend on how the monsoon actually plays out and whether global tensions ease in the coming months. But for now, his warning reflects a growing concern: if food and fuel costs rise together, Indian households may have to brace for more pressure on monthly budgets.