India's retail inflation accelerated to 4.38% in June, the highest reading since January 2025 and breaching the central bank's 4% target for the first time in 17 months, official data showed on Sunday.
Food inflation climbed to 5.32% while transport costs surged to 4.3%, up from 1.75% in May, driven by higher crude oil prices filtering through to consumers. A U.S.-Iran conflict and a weak monsoon have pushed up both food and fuel costs in the import-dependent economy. Silver and gold jewellery prices jumped 133% and 37% respectively.
The Reserve Bank of India projects FY27 consumer price inflation at 5.1%. An El Niño-induced monsoon deficit narrowed to 15% as of July 8, though the India Meteorological Department forecasts July rainfall 6% below average, keeping pressure on food prices.