Monsoon floods in North-East India raise power, logistics and inflation concerns

Heavy south-west monsoon rains have caused rivers across North-East India to rise sharply, raising worries about hydropower generation, coal transport and the movement of farm produce. Officials warn that the disruption could spread beyond the region, since power demand across the country stays high during the hot season and the monsoon has so far been uneven.

The North-East holds about 6 GW of India's 48 GW of installed hydropower capacity. Coal, however, remains the backbone of the power sector, supplying around 228.5 GW, or 42 percent, of the country's total installed generation capacity of 537.2 GW. A 24 June cloudburst in Arunachal Pradesh's Keyi Panyor district pushed debris into the Ranganadi dam, forcing all three turbines of the 405 MW Ranganadi project to shut down. Officials said restarting even one turbine could take 15 to 20 days.

Other projects have switched to flood-control mode. NHPC's Subansiri Lower project recently released about 10,000 cubic metres of water per second under its flood-moderation protocol, which lets reservoirs hold back excess inflow and release it at a steady rate. Any squeeze on coal output or transport could lift freight and logistics costs, a risk because thermal plants currently hold roughly 45 million tonnes of coal, enough for only about 14 days of demand at this year's peak of 270.8 GW.

The farm sector is also under strain. Floods have damaged standing crops in several districts and slowed the movement of perishable goods to wholesale markets, just as the kharif sowing season picks up. Paddy, the region's main kharif crop, is expected to suffer most from waterlogging, while vegetables, maize and spice crops have also been hit in pockets where fields remain submerged. The combined effect of lower output and higher freight costs could weigh on farm incomes and tighten supplies of some commodities.

These pressures arrive at a sensitive moment for prices. Retail inflation rose to 3.93 percent in May from 3.48 percent in April, while food inflation climbed to 4.78 percent from 4.20 percent. The India Meteorological Department has forecast continued rain across the North-East through early July and projected a below-normal monsoon overall, at about 90 percent of the long-period average. The final impact on production will depend on how fast floodwaters recede and whether farmers can replant.