The last couple of decades have seen the outburst of a number of satellite-based precipitation products with Tropical Rainfall Measuring Mission (TRMM) as the most widely used for hydrologic applications. Transition of TRMM into the Global Precipitation Measurement (GPM) promises enhanced spatio-temporal resolution along with upgrades to sensors and rainfall estimation techniques. The dependence of systematic error components in rainfall estimates of the Integrated Multi-satellitE Retrievals for GPM (IMERG), and their variation with climatology and topography, was evaluated over 86 basins in India for year 2014 and compared with the corresponding (2014) and retrospective (1998–2013) TRMM estimates. IMERG outperformed TRMM for all rainfall intensities across a majority of Indian basins, with significant improvement in low rainfall estimates showing smaller negative biases in 75 out of 86 basins. Low rainfall estimates in TRMM showed a systematic dependence on basin climatology, with significant overprediction in semi-arid basins, which gradually improved in the higher rainfall basins. Medium and high rainfall estimates of TRMM exhibited a strong dependence on basin topography, with declining skill in higher elevation basins. The systematic dependence of error components on basin climatology and topography was reduced in IMERG, especially in terms of topography. Rainfall-runoff modeling using the Variable Infiltration Capacity (VIC) model over two flood-prone basins (Mahanadi and Wainganga) revealed that improvement in rainfall estimates in IMERG did not translate into improvement in runoff simulations. More studies are required over basins in different hydroclimatic zones to evaluate the hydrologic significance of IMERG.