Retail inflation ticks up to 3.4%; fuel prices rise, transport stable amid Iran-US War

March saw higher inflation in gold and silver jewellery, coconut, tomato, and cauliflower, even as items like onion, potato, garlic, arhar dal, and chickpeas witnessed negative inflation. The ‘electricity, gas and other fuels’ segment recorded a CPI of 1.65 per cent.

India’s retail inflation has reached up to 3.4 per cent in March in comparison to 3.21 per cent in the last month. As per government data, this change is mainly attributed to the uptick in certain food items, amid the ongoing West Asia crisis. The CPI-based food inflation rate climbed to 3.87 per cent in March, from 3.47 per cent in the previous month. Even so, the March CPI remains below the Reserve Bank’s median target of 4 per cent.

“The headline CPI inflation rose slightly to 3.4 per cent in March 2026 from 3.2 per cent in February 2026, printing in line with ICRA’s forecast for the month, indicating a mild initial impact of the West Asian crisis on the headline number,” said Aditi Nayar, Chief Economist, ICRA.

Which items became pricier in March?

In March, inflation was elevated for gold and silver jewellery, coconut, tomato, and cauliflower, while items like onion, potato, garlic, arhar dal, and chickpeas recorded negative inflation, as per NSO data. The CPI was at 1.65 per cent in the ‘electricity, gas and other fuels’ segment during March, as against 1.52 in the preceding month. Inflation rates for rural and urban segments are 3.63 per cent and 3.11 per cent, respectively. Housing inflation rate for March 2026 was 2.11 per cent.

What do industry experts have to say?

“The sequential uptick in YoY inflation was driven by the food and the electricity, gas, and other fuels groups, with the latter reflecting the impact of the West Asia crisis across LPG and alternative fuels. Core (CPI excluding F&B and electricity, gas & other fuels) remained steady at 3.4 per cent in these months,” Nayar further added.

Commenting on CPI data, ASSOCHAM President Nirmal K Minda said the government’s approach to managing prices by keeping petrol and diesel rates unchanged, despite a sharp rise in international crude oil prices, is highly commendable. The RBI has also supported economic activity by maintaining a stable repo rate, he added.

ICRA Chief Economist Aditi Nayar said the CPI inflation rose slightly to 3.4 per cent in March over February, indicating a mild initial impact of the West Asian crisis on the headline number.

“The sequential uptick in year-on-year inflation was driven by food and electricity, gas and other fuels groups, with the latter reflecting the impact of the West Asia crisis across LPG and alternate fuels,” she said. NSO collects real-time price data from selected 1,407 urban markets (including online markets) and 1,465 villages covering all states/UTs.

With inputs from PTI