April 13 (Reuters) - India's retail inflation quickened AZN4SQJGO to 3.40% year-over-year in March from 3.21% in February, government data showed on Monday.
A Reuters poll had projected retail inflation at 3.48%.
ADITI NAYAR, CHIEF ECONOMIST, ICRA, GURUGRAM
"The headline CPI inflation rose slightly to 3.4% in March 2026 from 3.2% in February 2026, printing in line with ICRA's forecast for the month, indicating a mild initial impact of the West Asian crisis on the headline number.
ICRA expects the YoY inflation in the F&B segment to rise further and cross the 4% mark in April 2026 from 3.7% in March 2026, led by the vegetables, edible oils, and readymade food segments. Further, the impact of the unrest in West Asia will continue to feed into prices of several items such as alternate fuels, airfares, restaurants, which along with rising input prices is likely to harden the April 2026 headline inflation print. Overall, we expect the CPI inflation to cross 4.0% in April 2026, coming back into the upper half of the MPC's medium term target range."
VIKRANT CHATURVEDI, ASSOCIATE DIRECTOR, RESEARCH, BRICKWORK RATINGS, MUMBAI
"The data indicate that higher energy and fuel-related costs are beginning to exert upward pressure, even as food inflation, at 3.87%, remains broadly manageable. Overall, the inflation print suggests that macroeconomic stability is intact, but the evolving global environment, particularly volatility in crude oil markets, calls for continued vigilance.
Looking ahead, headline inflation is expected to hover near current levels in the second half of the year, provided supply-side conditions remain favourable. The RBI is likely to maintain its neutral stance through the next quarter, as persistent services inflation and volatility in precious metals offset relief in the food basket. For credit markets, this stability reduces the risk of abrupt monetary tightening, helping sustain investor confidence in the macroeconomic framework and debt sustainability."
SUMAN CHOWDHURY, CHIEF ECONOMIST, SIDBI, MUMBAI
"The only impact is the increase in LPG prices which happened in March. Otherwise, we haven't seen much of an impact from retail fuel prices, which are largely being absorbed by the oil marketing companies. That is why we are still seeing a very healthy number and a good inflation trend. But having said that, the RBI expects significant upside risks to inflation in 2026-27. We don't yet know how long this Iran conflict will continue. And depending if it continues for a longer time, and if oil is over $100 a barrel for more than a few months, there's a very significant likelihood that even the RBI estimate of 4.6% for the next year is likely to be breached.
Additional factor is the risk of a below normal monsoon, which is quite a possibility in the current year. So if both of these factors play out, which is a very longer conflict, higher oil prices, along with below normal monsoon, we may see a significant upside risk to inflation, which can be then going about 5% or maybe or 6%. If inflation does get entrenched, there is a risk of an increase in interest rates."
MADAN SABNAVIS, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI
"CPI inflation for March was at 3.4% as against our expectation of 3.7%. This was higher in rural India at 3.6% while it was 3.1% in urban areas.
Going ahead inflation may be expected to increase gradually towards the 4% mark projected by the RBI for Q1. The present tendency for inflation to rise will be carefully monitored by the RBI especially in the wake of the war as well as monsoon prospects when taking a call on interest rates. A prolonged pause as of now looks very likely."
KUNAL KUNDU, INDIA ECONOMIST, SOCIETE GENERALE, BENGALURU
"Escalating tensions in the Middle East--particularly concerns around oil supply disruptions through the Strait of Hormuz--exerted some upward pressure on fuel linked components. That said, the impact on headline inflation was contained, aided by the continued maintenance of retail petrol and diesel prices.
Looking ahead, we expect inflationary pressures to build modestly in April as higher input costs--especially in petrochemicals and LNG--begin to pass through to final prices. An inconclusive ceasefire agreement heightens the risk of prolonged supply chain disruptions, with potential knock on effects for costs and prices. However, the prevailing degree of geopolitical uncertainty makes definitive forecasting challenging at this stage. Against this backdrop, our expectation of the RBI remaining on a prolonged policy rate pause remains unchanged."
GAURA SENGUPTA, INDIA ECONOMIST, IDFC FIRST BANK, MUMBAI
"The march CPI shows limited pass through of higher input cost by producers to consumers. Moreover, retail, petrol and diesel prices remain unchanged. There has been some increase in LPG, ATF and CNG, but it is ranged bound.
The majority of the price shock has been absorbed by the government, OMCs for now. We expect rise in pass through of price pressures to the consumers in the coming months. FY 27 CPI inflation is expected to average at 4.9%."
SUJIT KUMAR, CHIEF ECONOMIST, NATIONAL BANK FOR FINANCING INFRASTRUCTURE AND DEVELOPMENT, MUMBAI
"Retail inflation edged up in March 2026, to 3.4% led by food prices. Core inflation, excluding food, beverages and fuel prices, remained steady at 3.7%, indeed modestly down on month to month basis, suggesting broader price pressures remain contained. There is need to watch for pass through of crude and commodity prices that have risen amidst development around War in West Asia, going forward."
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
"The inflation print for March has come in at a benign level of 3.4%, lower than our expectation. This confirms that despite the rise in energy costs in the month of March, the pass through to retail inflation has been limited. This print confirms that the RBI has sufficient headroom before turning hawkish and looking at tightening policy.
That said, continued disruptions and elevated energy prices for an extended period of time could ultimately be passed on to consumers if producers continue to face margin pressures. We expect headline inflation to average at 4.9% in FY27."
VIKRAM CHHABRA, SENIOR ECONOMIST, 360 ONE ASSET, MUMBAI
"Retail inflation edged up only marginally in March, as higher energy costs were largely absorbed rather than passed on to consumers. However, inflation is expected to firm up gradually as elevated input costs, driven by the ongoing West Asia crisis, are increasingly passed through to consumers.
We are tracking early signs of price revision across FMCG, cement, paints, consumer durables and other categories, which could add to headline inflation in the coming months. Additionally, there are upside risks to food inflation stemming from a potentially weak monsoon."
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
"March inflation numbers were modestly higher, signalling the first round of price pressures in wake of the Middle East crisis. Input costs were selectively passed on to end consumers, and food costs continue to normalise, besides precious metal coming off the boil but still up double digits on the year.
We expect the impact of higher energy prices to gradually percolate in the coming months as replacement supplies arrive with a lag, while monitoring the risk of a fuel price increase in the coming weeks. Core inflation, meanwhile, stayed below 4%, reducing the need for the central bank to assume a hawkish stance in the near-term. Impact of higher oil and gas prices are likely to be more material in the WPI index."
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"The CPI inflation came in line with our expectations. We expect the trajectory to continue to trend higher, while remaining watchful on the risks from sub-par monsoons and second order pass through of higher input prices and weakening INR.
However, we expect the RBI to maintain status quo on rates in the foreseeable future as more clarity emerges between the balance of risks between growth and inflation."
(Reporting by Urvi Dugar, Pranav Kashyap, Anuran Sadhu and Kashish Tandon; Compiled by Abinaya V; Editing by Ronojoy Mazumdar)
