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Informist, Tuesday, Apr. 7, 2026

 

By Shweta

 

NEW DELHI – India's retail inflation, based on the CPI, likely rose in March as the war in West Asia pushed fuel inflation higher, economists said. According to an Informist Poll of 13 economists, CPI inflation is expected to have risen to 3.4% in March from 3.21% in February.

 

Retail inflation was 3.34% in March 2025, based on the old CPI series with 2012 as the base year. The government revised the CPI series earlier this year, updating the base year to 2024 and increasing the number of items whose prices are tracked. The statistics ministry will release inflation data for March at 1600 IST Monday.

 

The US-Israel war on Iran, which started on Feb. 28, has dented oil and gas supply due to attacks on oil refineries in the West Asia region and also because of the closing of the Strait of Hormuz. Supply of energy to India has also been disrupted as nearly 45% of India's crude oil imports and around 90% of LPG imports pass through the Strait.

 

Considering the current geopolitical situation, economists have raised their estimates for CPI inflation for 2026–27 (Apr-Mar). Economists now expect inflation to average 4.5-5% this year, 50 bps higher than previously projected. The Reserve Bank of India will detail its growth and inflation forecasts for FY27 on Wednesday, where the Monetary Policy Committee is expected to hold the repo rate at 5.25%.

 

MARCH INTERNALS

Fuel inflation is seen rising in March from 0.1% in February after oil marketing companies raised prices of domestic and commercial liquefied petroleum gas, economists said. "While the government and oil marketing companies are absorbing most of the shock by keeping retail petrol and diesel prices unchanged, the 7% LPG price hike has likely translated into close 11 basis points spike in headline inflation with almost 2% weight in CPI," economists at Union Bank of India said in a note.

 

A fall in vegetable prices from February could help offset the impact of the cooking gas price hike, economists said. According to data from the Department of Consumer Affairs, retail prices of tomato declined 14% on month in March. Potato and onion prices fell near 6?ch from February. "Prices of other food products also remain benign except for oil & fats which is seeing some uptick," economists at Nirmal Bang Equities Pvt. Ltd. said in a note.

 

Core inflation--which excludes food and fuel items, whose prices can be volatile--is seen at 3.5% in March, up from 3.4% in February, according to economists' estimates. "For core inflation, we estimate a more moderate increase at this stage as the pass-through to retail inflation (given second round effects of the rise in commodity prices) is likely to be gradual initially," HDFC Bank said in a report. A decline in the prices of gold and silver is also likely to keep core inflation in check in March, economists said.

Based on the old CPI series, the Reserve Bank of India has projected retail inflation to average 3.2% in the March quarter and then rise to 4.2% by the September quarter. If inflation rises to 3.4% in March, the average for the March quarter would be 3.1%, a tad lower than the central bank's projection. 

 

The following is a summary of the poll on CPI inflation in March, in ascending order:

 

ORGANISATION	CPI INFLATION ESTIMATE
Nirmal Bang Equities	3.18%
QuantEco Research	3.3%
IDFC FIRST Bank	3.3%
STCI Primary Dealer	3.3%
Pantheon Macroeconomics	3.4%
ICRA	3.4%
Kotak Mahindra Bank	3.4%
Sunidhi Securities	3.43%
Union Bank of India	3.44%
CareEdge Ratings	3.5%
Bank of Baroda	3.7%
India Ratings and Research	3.7%
HDFC Bank	4.0%

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

With inputs from Shubham Rana

Edited by Vandana Hingorani

 

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