New Delhi, Apr 13: India’s Consumer Price Index (CPI)-based inflation rose modestly to 3.40% year-on-year (y-o-y) in March 2026 (provisional), compared to 3.21% in February 2026, according to analysis by the PHD Chamber of Commerce and Industry (PHDCCI). While inflation remains within manageable levels, rising food prices continue to pose near-term risks.
Rural inflation stood at 3.63%, slightly higher than urban inflation at 3.11%, reflecting persistent price pressures in rural consumption baskets. Meanwhile, food inflation (CFPI) increased to 3.87% y-o-y, up from 3.47% in the previous month, indicating renewed volatility in essential commodities.
Commenting on the trend, Rajeev Juneja, President, PHDCCI, said:
“The current headline CPI inflation at 3.40% remains broadly aligned with the RBI’s medium-term price stability objective. While transport and housing inflation remain subdued, volatility in food components requires continued policy vigilance, especially amid concerns of a potential weak monsoon due to El Niño conditions.”
Food Prices: Mixed Trends Shape Inflation
Food and beverages, which carry a significant weight of 36.75% in the CPI basket, continue to influence overall inflation dynamics. Several essential commodities witnessed notable price declines:
- Onion prices declined by 27.76%
- Potato prices fell by 18.98%
- Pulses such as arhar/tur remained in negative territory
These declines helped offset upward pressures from certain vegetables, including:
- Tomato prices surged by 35.99%
- Cauliflower prices rose by 34.11%
At a broader level, inflation across most categories remained contained, with transport inflation staying near zero, reflecting stable fuel and logistics costs.
Outlook: Stable but Watchful
Ranjeet Mehta, Secretary General & CEO, PHDCCI, noted:
“CPI inflation is expected to remain within a manageable range in the near term, supported by moderation in key food items. However, upside risks persist due to supply-side disruptions in perishables and fluctuations in global commodity prices.”
The overall inflation trajectory will depend on several critical factors, including monsoon performance, global input costs, and domestic demand conditions.
Conclusion
While India’s inflation remains within the comfort zone, the evolving food price scenario and external risks warrant close monitoring. Policymakers are expected to maintain a balanced approach to ensure price stability while supporting economic growth.
