India CPI Inflation Unexpectedly Benign

India's April 2026 CPI inflation rose weakly to 3.5% y/y, missing expectations. While core inflation remains steady, high energy prices are expected to drive rates higher by late 2026.

Key Takeaways

• 1.April CPI inflation rose to 3.5% y/y, undershooting market expectations by 30bp, despite persistent energy price pressures from the Middle East.
• 2.Core inflation remained steady at 3.7% y/y for the fourth consecutive month, while refined core (excluding precious metals) edged up to 2.2%.
• 3.The RBI Monetary Policy Committee (MPC) is expected to pause the repo rate in June but likely to implement two 25bp hikes in Q4 2026 as inflation averages 5% in FY27.

Table of Contents

• Authors
• Contact
• Key highlights
• Outlook
• Important Notice

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