Forbes India
India’s retail inflation rose to 3.48 percent in April 2026, up from 3.4 percent in March, according to government data released on Tuesday. This was the highest rate since the new CPI series began this January. Food inflation also edged up to 4.2 percent in April from 3.87 percent in March. Rural inflation at 3.74 percent outpaced urban rate at 3.16 percent.Analysts warn that tensions in West Asia threaten to keep global crude oil prices elevated, with any pass-through to domestic fuel prices capable of broad second-order effects across the economy. Separately, the onset of the southwest monsoon is being watched closely, with fears that an uneven or deficient season due to an El Niño event could reignite food inflation.Also Read: West Asia crisis slows down March IIP growth to 5-month low of 4.1%Food and precious metals drive the uptickFood inflation accelerated sharply in April, driven by tomatoes (35.3 percent), coconut (44.6 percent), and cauliflower (25.6 percent) prices, even as potatoes (-23.7 percent) and onions (-17.7 percent) remained firmly in deflation territory.Apart from food, personal care products saw the highest inflation mainly due to precious metals, with silver and gold propping up the number. While the overall inflation rate for personal care items was 17.7 percent, for silver jewellery it was 144.3 percent and for gold/diamond and platinum jewellery it was 40.7 percent.Moreover, core inflation (inflation excluding food and fuel) increased marginally to 3.31 percent in April from 3.28 percent in the previous month. Gas, housing, fuel and electricity inflation stood at 1.71 percent in April. Megha Arora, director, India Ratings and Research, notes that fuel inflation “remained muted due to base effect”.Restaurants and accommodation services posted 4.2 percent inflation, a direct fallout of higher LPG prices passed on to consumers. Paan, tobacco and intoxicants recorded 4.76 percent inflation, with higher GST on these products amplifying costs.Pockets of reliefNot all categories were under pressure. Transport inflation was marginally negative at -0.01 percent, dragged down by lower vehicle prices. Clothing and footwear and education posted relatively modest readings of 2.8 percent and 3.15 percent, respectively. Housing inflation was at 2.15 percent in April, with rural rates (2.65 percent) outpacing urban housing inflation (1.96 percent).Health, communications, and recreation remained subdued, offering some comfort in the overall basket.RBI rate cuts looking distantWhile the headline number sits well below the Monetary Policy Committee’s 4 percent target, Madan Sabnavis, chief economist at Bank of Baroda, cautions against complacency. “We see two threats: A rise in retail petrol and diesel prices on higher crude oil, and El Niño’s potential impact on the kharif crop and food prices” he says, adding that the rupee depreciation will push prices further. “We can expect a long pause for the time being. A rate hike towards the end of the year is possible if inflation crosses 5 percent, and the OIS market signals a possible increase in the next nine months.”
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