India’s April Retail Inflation Edges up to 3.48% As Food Prices Rise
Meanwhile, the data also showed that inflation in rural areas stood at 3.74 per cent, higher than the 3.16 per cent recorded in urban India.
New Delhi: Moving closer to the medium-term target of the Reserve Bank of India (RBI), India’s headline retail inflation edged higher in April to 3.48 per cent compared to 3.40 per cent in the preceding month, mainly due to an uptick in food prices. However, the impact of elevated crude oil prices amid the ongoing West Asia crisis still remains a concern.
As per the National Statistics Organisation (NSO) data, the retail inflation rate based on all India consumer price index (CPI) with base year 2024 for April was 3.48 per cent. “Food inflation in April was 4.2 per cent compared to 3.87 per cent in March. Among the key food items, tomato prices surged 35.28 per cent in the same month, while potato and onion prices remained in deflation at minus 23.69 per cent and minus 17.67 per cent, respectively,” the NSO data showed.
Meanwhile, the data also showed that inflation in rural areas stood at 3.74 per cent, higher than the 3.16 per cent recorded in urban India. “Among key items, silver jewellery recorded the sharpest inflation at 144.34 per cent in April, though slightly lower than 148.42 per cent in March. Gold, diamond and platinum jewellery inflation also remained elevated at 40.72 per cent,” the data showed.
Last month, the RBI projected the CPI inflation for 2026-27 at 4.6 percent, with 4 per cent in Q1. It also said that persistently elevated energy prices due to the West Asia conflict and possible El Nino conditions, which could have a negative impact on the southwest monsoon, pose upside risks to inflation.
However, economists and analysts said that the April CPI figure is encouraging despite supply disruptions in petrochemicals arising from the Gulf crisis. “Manufacturers across sectors like plastics, pharma, and personal care products continue to absorb a significant part of the increase in input costs, restaurant menus saw a notable increase of inflation, rising to 4.21 per cent in April from 2.89 per cent in March. This indicates that higher LPG and fuel costs are gradually being passed on to end consumers,” said Debopam Chaudhuri, chief economist, Piramal Finance.
“Today’s CPI print reinforces the favourable starting point for inflation in the backdrop of the current conflict and provides the central bank sufficient headroom before turning hawkish. That said, an increase in pump prices, as oil prices remain above $100 pbl, could push up inflation over the coming months both through the direct and indirect impact by raising transport costs,” said Sakshi Gupta, principal economist, HDFC Bank.
“The risks to inflation remain skewed towards the upside emanating from higher energy prices, rupee weakness as well as any disruptions due to El Nino during the monsoon season. We currently estimate inflation to average close to 5 per cent with upside risks to our forecasts,” Gupta added.
