Retail Inflation Rises To 3.48% In April Amid Higher Food Prices

India’s retail inflation increased to 3.48% in April, driven by higher food prices, according to data released by the Ministry of Statistics and Programme Implementation on Tuesday.

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The Consumer Price Index (CPI)-based inflation print was higher than March levels but remained below the 3.8% estimate projected in a Reuters poll.

Food inflation rose to 4.2% during the month, contributing to the increase in headline inflation. The rise came even as retail fuel prices remained largely unchanged despite elevated crude oil prices in global markets.

The government has so far not revised petrol and diesel prices significantly, limiting the immediate impact of higher energy costs on household inflation.

Energy Prices Remain A Key Risk

Due to the continued strife in West Asia, global crude oil prices have been high, putting more pressure on the import bill of India and their inflation outlook.

A significant proportion of the country’s crude oil demand comes from imports; thus, any changes in international energy prices could affect their inflation rates.

Retail fuel prices have held steady even when Brent crude was priced at more than $100 per barrel in April. However, commercial fuel prices and industrial input costs have witnessed pressure from higher global energy prices.

Data released earlier showed wholesale inflation rising sharply in April due to increases in fuel, power and manufacturing costs.

Core Inflation Stays Moderate

Core inflation, which excludes food and fuel items, remained relatively contained in April, indicating that broader consumer demand conditions have not seen a sharp price surge.

Transport prices also remained stable during the month despite volatility in global oil prices.

The inflation data comes at a time when policymakers are closely monitoring the impact of imported inflation risks linked to crude oil, commodity prices and currency weakness.

According to official data, consumer inflation has remained within the Reserve Bank of India’s medium-term target band of 2-6%.

RBI Monitoring Inflation And Growth Risks

At its recent monetary policy review, the Reserve Bank of India highlighted external risks arising from geopolitical tensions and fluctuations in commodity prices.

RBI Governor Sanjay Malhotra had said the Indian economy remains better placed to absorb external shocks compared with previous periods, while noting that global developments continue to create uncertainty for inflation and growth. The central bank has projected CPI inflation at 4.6% for FY27.

Apart from energy prices, weather-related risks are also being tracked closely after concerns over El Niño conditions and their possible impact on monsoon rainfall and agricultural output.

India Meteorological Department forecasts and movements in crude oil prices are expected to remain key indicators for the inflation trajectory in the coming months.

The latest inflation reading indicates that food prices contributed most to the rise in April consumer inflation, while the impact of higher crude oil prices on retail fuel rates remained limited during the month.