Below-average monsoon rains may reduce rice output this year, as well as cut growth in the farm sector to below the government's target of 4 percent, Agriculture Minister Sharad Pawar said on Monday.
India is the world's second-biggest producer of rice and wheat and the slow progress of the monsoon, which is so far 22 percent below average, has raised concerns about these crops.
More than half of India's arable land is rain-fed and the farm sector contributes around 15 percent to Asia's third largest economy.
"It is a challenge for farmers to meet the same performance as in the last two years," Pawar told reporters. "This year, the monsoon is playing hide-and-seek."
India has enjoyed bumper harvests in rice and other grains over the past two years.
The monsoon rains have been below average since the start of the season in June, but they improved in the past week for the first time in the current season.
Rice, the main food crop of the world's second most populous country, accounts for about 70 percent of total grain output in the summer season.
Pawar said it was too early to say whether the government would scrap unrestricted exports of rice, wheat, sugar and cotton, a policy it had adopted last year.
"We have not come to a level where we can apprehend a drought. We will wait up to the second week of August," he said.
India is the world's largest sugar consumer and the second largest producer, and the progress of the monsoon is a crucial factor in determining physical and futures prices.
Pawar said the government has huge stockpiles of grains and was ready with contingency plans to meet "any eventuality".
By July 1, government rice stocks were 30.7 million tonnes, much higher than the 9.8 million tonnes targeted for the quarter to end-September. Wheat stocks were 49.8 million tonnes against the quarterly target of 17.1 million tonnes.
