India’s inflation rises to 3.4 per cent in March on CPI data

India’s inflation rose to 3.4 per cent in March under the new CPI series, driven by higher vegetable prices, while pulses and some food items became cheaper. The RBI expects inflation at 4.6 per cent in 2026-27

New Delhi: India’s inflation rate, based on the new Consumer Price Index (CPI) series with 2024 as the base year, edged up to 3.4 per cent in March compared to the same month of the previous year, according to data released by the Ministry of Statistics on Monday.

The commodities that recorded the highest inflation during the month were silver jewellery, which saw a 148.61 per cent jump in prices, and gold jewellery, which clocked a 45.92 per cent increase in prices.

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Overall food inflation in March stood at 3.87 per cent, largely because vegetables such as tomato and cauliflower turned more expensive during the month. However, the prices of onion, potato, and garlic recorded a double-digit decline during the month compared to the same month of the previous year, while pulses also turned cheaper. The prices of arhar and tur daal dropped by 9.56 per cent, while chickpea registered a 7.87 per cent fall in price.

Sequentially, the inflation in March was a tad higher than 3.21 per cent in the previous month of February and the revised figure of 2.74 per cent for January this year, when the new series was launched.

Meanwhile, the Reserve Bank of India (RBI), last week, projected the country’s inflation rate, based on the consumer price index (CPI) for 2026-27, at 4.6 per cent as the near-term food supply prospects have been boosted by a robust rabi crop which provides some comfort amid rising oil prices in the international market due to the Iran war.

RBI Governor Sanjay Malhotra said: “The pass-through of higher global energy prices has resulted in price increases in select fuels such as premium petrol, LPG, and diesel for industrial use. On the other hand, the near-term food supply prospects have been boosted by a robust rabi crop, providing some comfort.”

Considering all these factors, CPI inflation for 2026-27 is projected to be at 4.6 per cent with Q1 at 4.0 per cent; Q2 at 4.4 per cent; Q3 at 5.2 per cent; and Q4 at 4.7 per cent, the RBI Governor said.

However, 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, he observed.

Malhotra said that India’s core inflation, which excludes food and fuel prices, is projected at 4.4 per cent for 2026-27 and, excluding precious metals, it is even lower, indicating that underlying inflation pressures are expected to remain contained.