India’s March Inflation Edges Up to 3.48% Amid Fuel Pressures

India’s consumer inflation likely rose slightly to 3.48% in March from 3.21% in February, according to a Reuters poll of economists. The increase comes despite easing gold prices, which fell around 11% during the month and helped offset rising fuel costs triggered by geopolitical tensions. Food inflation remained relatively stable due to strong supply conditions, keeping overall price pressures contained.

The surge in global oil prices following the late-February conflict involving Iran led to higher fuel costs and shortages in India. However, government tax cuts on petrol and diesel helped cushion the impact on consumers, preventing a sharper rise in retail inflation. As a result, inflation has stayed below the central bank’s 4% target for over a year, with policymakers opting to keep interest rates unchanged.

Looking ahead, economists warn that inflationary pressures could build as higher oil prices gradually feed into the broader economy. Core inflation is estimated to have inched up to 3.53%, while wholesale inflation likely rose to 3.04% in March. With crude prices still elevated despite a ceasefire, risks remain that inflation could trend higher in the coming months.

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