<p>New Delhi: Retail inflation rose to 3.4 per cent in March, the highest in 13 months, as high energy costs and supply-side pressures due to the West Asia conflict weighed on food and fuel prices, official data showed on Monday.</p><p>Food inflation, which carries the largest weight in the Consumer Price Index (CPI), rose to 3.87 per cent during the month under review. Price rise was sharper in rural areas with rural food inflation rising to nearly 4 per cent.</p>.WPI inflation jumps to 11-month high of 2.13% in February.<p>The March inflation was the highest in the financial year 2025-26. It stood at 3.21 per cent in February and 2.74 per cent in January.</p><p>This sequential uptick was driven by food, electricity, gas and other fuels groups. Prices of liquefied petroleum gas (LPG), industrial diesel and premium petrol were increased in March following the surge in crude oil price in the international markets. However, retail prices of normal petrol and diesel remain unchanged. Petrol and diesel have combined weight of 4.8 per cent in the CPI, while LPG and PNG together have a smaller weight of 1.98 per cent.</p><p>Analysts said retail inflation was fairly insulated from the global energy price shock due to the measures taken by the government to keep diesel and petrol prices steady.</p><p>“Despite elevated geopolitical tensions, the limited uptick suggests that pass-through effects are yet to be seen,” said Gulam Zia, Senior Executive Director at Knight Frank India.</p><p>“We expect the impact of higher energy prices to gradually percolate over the coming months, as replacement supplies arrive with a lag. At the same time, we continue to monitor the risk of a fuel price increase in the weeks ahead,” said Radhika Rao, Executive Director and Senior Economist at DBS Bank.</p><p>Core inflation (CPI excluding volatile food and energy sectors) stood at 3.4 per cent. It has remained largely unchanged for the past three months.</p><p>Exchange rate fluctuations, high oil prices and other external shocks due to the West Asia conflict pushed imported inflation to 6.49 per cent. The imported inflation, which has 21.84 per cent weight in CPI, contributed 43 per cent to the overall inflation during the month under review.</p><p>According to analysts, the retail inflation is likely to hit around 4 per cent in April and remain elevated in the coming months.</p><p>"The impact of the unrest in West Asia will continue to feed into prices of several items such as alternate fuels, airfares (owing to higher ATF prices), restaurants (owing to higher commercial LPG prices), which along with rising input prices is likely to harden the April 2026 headline inflation print,” said Aditi Nayar, Chief Economist, ICRA.</p><p>"In the coming months, while a low base will perk up food inflation, the adverse impact of heatwaves and increased risk from a below-normal southwest monsoon assign an upside to food inflation," said Dipti Deshpande, Principal Economist, Crisil.</p>
<p>New Delhi: Retail inflation rose to 3.4 per cent in March, the highest in 13 months, as high energy costs and supply-side pressures due to the West Asia conflict weighed on food and fuel prices, official data showed on Monday.</p><p>Food inflation, which carries the largest weight in the Consumer Price Index (CPI), rose to 3.87 per cent during the month under review. Price rise was sharper in rural areas with rural food inflation rising to nearly 4 per cent.</p>.WPI inflation jumps to 11-month high of 2.13% in February.<p>The March inflation was the highest in the financial year 2025-26. It stood at 3.21 per cent in February and 2.74 per cent in January.</p><p>This sequential uptick was driven by food, electricity, gas and other fuels groups. Prices of liquefied petroleum gas (LPG), industrial diesel and premium petrol were increased in March following the surge in crude oil price in the international markets. However, retail prices of normal petrol and diesel remain unchanged. Petrol and diesel have combined weight of 4.8 per cent in the CPI, while LPG and PNG together have a smaller weight of 1.98 per cent.</p><p>Analysts said retail inflation was fairly insulated from the global energy price shock due to the measures taken by the government to keep diesel and petrol prices steady.</p><p>“Despite elevated geopolitical tensions, the limited uptick suggests that pass-through effects are yet to be seen,” said Gulam Zia, Senior Executive Director at Knight Frank India.</p><p>“We expect the impact of higher energy prices to gradually percolate over the coming months, as replacement supplies arrive with a lag. At the same time, we continue to monitor the risk of a fuel price increase in the weeks ahead,” said Radhika Rao, Executive Director and Senior Economist at DBS Bank.</p><p>Core inflation (CPI excluding volatile food and energy sectors) stood at 3.4 per cent. It has remained largely unchanged for the past three months.</p><p>Exchange rate fluctuations, high oil prices and other external shocks due to the West Asia conflict pushed imported inflation to 6.49 per cent. The imported inflation, which has 21.84 per cent weight in CPI, contributed 43 per cent to the overall inflation during the month under review.</p><p>According to analysts, the retail inflation is likely to hit around 4 per cent in April and remain elevated in the coming months.</p><p>"The impact of the unrest in West Asia will continue to feed into prices of several items such as alternate fuels, airfares (owing to higher ATF prices), restaurants (owing to higher commercial LPG prices), which along with rising input prices is likely to harden the April 2026 headline inflation print,” said Aditi Nayar, Chief Economist, ICRA.</p><p>"In the coming months, while a low base will perk up food inflation, the adverse impact of heatwaves and increased risk from a below-normal southwest monsoon assign an upside to food inflation," said Dipti Deshpande, Principal Economist, Crisil.</p>