Driven by rising costs for LPG and select vegetables, India’s retail inflation, measured by the Consumer Price Index (CPI), climbed to a 13-month high of 3.4 per cent in March. This marks an increase from the 3.2 per cent recorded in February, according to data released by the Statistics Ministry on Monday.
This headline figure reflects the impact of the first full month of the ongoing conflict in West Asia. Experts anticipate that while retail inflation may climb in the near term due to volatile energy prices, it will likely stabilise around 4 per cent. Consequently, the Reserve Bank of India (RBI) is expected to maintain its current pause on policy interest rates.
Food inflation mixed; regional disparities widen
According to data from the National Statistical Office (NSO), food inflation rose to 3.87 per cent in March, up from 3.47 per cent in February. Significant price hikes were recorded in gold and silver jewellery, coconut (copra), tomato, and cauliflower. Conversely, several staples saw negative inflation, including onion, potato, garlic, arhar dal, and chickpeas. In the ‘electricity, gas, and other fuels’ segment, the CPI edged up to 1.65 per cent in March from 1.52 per cent the previous month. Geographically, Telangana recorded the highest inflation at 5.83 per cent, while Mizoram saw the lowest at 0.66 per cent.
Economists flag early pass-through of energy costs
“March inflation numbers were modestly higher, signaling the first round of price pressures in the wake of the Middle East crisis,” said Radhika Rao, Senior Economist at DBS Bank. Input costs were selectively passed on to end consumers, while food prices continued to normalise.
Vikrant Chaturvedi, Associate Director at Brickwork Ratings, found that higher energy and fuel-related costs are beginning to exert upward pressure, even as food inflation at 3.87 per cent remains broadly manageable.
Monsoon outlook and policy pause in focus
The upcoming monsoon, too, remains a pivotal factor in the inflation outlook. Megha Arora, Director at India Ratings & Research (Ind-Ra), noted that April’s inflation is projected to climb to 3.8 per cent, cautioning that the April–June quarter could surpass the RBI’s 4 per cent forecast as high energy costs are passed on to consumers.
Experts do not see any near-term possibility of a policy rate change. Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, said RBI is expected to maintain the status quo on rates as more clarity emerges on the balance of risks between growth and inflation.
Published on April 13, 2026