India Inflation Update and RBI Policy Outlook

India's April CPI inflation rose modestly to 3.5% yoy, led by food, while core inflation held steady at 3.4%. Consequently, Goldman Sachs has pushed its expectation for a 50bp RBI rate hike cycle from Q2 to Q4 2026.

Key Takeaways

• 1.April headline CPI inflation rose to 3.5% yoy, driven by higher food prices (edible oils and pulses), though it remained below consensus expectations.
• 2.Core inflation remained stable at 3.4% yoy, suggesting input cost pass-through from the Middle East conflict is currently only partial.
• 3.The projected 50bp RBI rate hike cycle has been delayed from Q2 to Q4 2026, with 25bp hikes now expected in October and December.

Table of Contents

• Bottom line
• Key numbers
• Main points
• Disclosure Appendix
• Reg AC
• Disclosures
• Global product; distributing entities
• General disclosures

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