India’s inflation rate, based on the new Consumer Price Index (CPI) series with 2024 as the base year, increased to 3.4% in March compared to the same period last year. Silver jewellery prices surged by 148.61%, while gold jewellery prices rose by 45.92% during the month.
In March, overall food inflation stood at 3.87%, driven by the increased prices of vegetables like tomato and cauliflower. However, onion, potato, and garlic prices saw a double-digit decline, along with cheaper pulses. Arhar and tur daal prices dropped by 9.56%, while chickpea prices fell by 7.87%.
Sequentially, March’s inflation rate was slightly higher at 3.21% compared to February’s 2.74% and the revised figure of 2.74% for January when the new series was introduced. The Reserve Bank of India (RBI) projected the country’s inflation rate for 2026-27 at 4.6%, citing improved food supply prospects from a strong rabi crop amid rising global oil prices due to the Iran conflict.
RBI Governor Sanjay Malhotra highlighted that higher global energy prices led to increased fuel costs like premium petrol, LPG, and diesel for industrial use. Despite this, the robust rabi crop offers some relief in the near term. The CPI inflation for 2026-27 is estimated at 4.6%, with Q1 at 4.0%, Q2 at 4.4%, Q3 at 5.2%, and Q4 at 4.7%.
Elevated energy prices due to the West Asia conflict and potential El Nino conditions pose inflation risks. Core inflation, excluding food and fuel, is projected at 4.4% for 2026-27, indicating controlled underlying inflation pressures.
