Barotropic-Baroclinic instability of horizontally and vertically shearing mean monsoon flow during July is investigated numerically by using a 10-layer quasi-geostrophic model. The most unstable mode has a wavelength of about 3000 km and westward phase speed of about 15 m sec-1. The most dominant energy conversion is from zonal kinetic energy to eddy kinetic energy. The structure of the most unstable mode is such that the maximum amplitude is concentrated at about 150 mb and the amplitude at the lowest layers is negligibly small. Barotropic instability of the zonal flow at 150 mb seems to be the primary excitation mechanism for the most unstable mode which is also similar to the observed westward propagating waves in the upper troposphere during the monsoon season. The results further suggest that Barotropic-Baroclinic instability of the mean monsoon flow cannot explain the occurrence of monsoon depressions which have their maximum amplitude at the lower levels and are rarely detected at 200 mb.