Almost all top CEOs based overseas are keeping an eye on the Indian monsoon. Whether it is the CEO of Maruti Suzuki in Tokyo or the top honcho of Unilever in London or the PepsiCo CEO in the US, the Indian monsoon is now playing an important role in their business projections as their Indian operations have become quite big. At the end of the year, the bonus of these CEOs will depend on whether the Indian monsoon does a command performance and leads to higher sales.

These CEOs are paying close attention to the Indian Meteorology Department (IMD), which officially declared the arrival of the monsoon on June 8, five days behind schedule and almost a week later than usual. As such, the monsoon rains are off to a slow start, with rainfall at 60% below normal in the first week of June. This number should start improving with the monsoon making landfall in the rest of the country. The late arrival in itself is not a material development, as the monsoon’s arrival tends to vary year to year, and the onset is not indicative of the progress through the season. Geographical distribution of rainfall over the course of the next four months and effects of a potential El Niño weather pattern will be closely watched for their effects on sowing, food production and inflation.

The CEOs are particularly happy that in its second long-range forecast, the IMD maintained its outlook for a “normal” monsoon and expects total rainfall to be 96% of the long-period average (LPA). Better rains means better income for farmers and they buy more products which, in turn, means better earnings for the global CEOs.