A fuel nozzle hangs from a gas pump at a fuel station in Guwahati, India, on March 11, 2026. Oil prices have reversed from recent highs and fallen to around $90 per barrel following U.S. President Donald Trump’s comments on the Iran conflict. Markets remain volatile as traders closely monitor developments in the geopolitical situation. (Photo by David Talukdar/NurPhoto, Getty Images)
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India’s consumer inflation rate rose for the fourth consecutive month to 3.21% in February from 2.75% in the previous month.
The main inflation rate was in line with economists’ expectations for a 3.1% rise in the consumer price index, according to a Reuters poll.
India’s Ministry of Statistics and Program Implementation said in a statement on Thursday that food inflation rose 3.47% year-on-year in February, also up from January’s 2.13% rise.
This is the second consumer price index measurement based on a revised data series in which the base year was changed from 2012 to 2024 to reflect changes in consumption patterns.
In a February statement, the government said the base year was changed because of “significant structural changes in consumption behavior, income levels, urbanization, service sector expansion and digitalization.”
India’s central bank said at its last monetary policy meeting on Feb. 5 that it expected inflation to be 2.1% this fiscal year, adding that the outlook for food supplies “remains positive” in the short term.
But experts said inflation would remain within the Reserve Bank of India’s 2-6% target range, but policy action was unlikely due to the escalating conflict in the Middle East.
A looming energy crisis
The US-Israel war with Iran has disrupted maritime traffic in the Strait of Hormuz, a key corridor for global energy trade, and is threatening India’s supply of crude oil and liquefied petroleum gas (LPG), a staple food fuel.
Currently, about 30% of India’s crude oil supplies and 90% of its LPG imports pass through the Strait of Hormuz, the government said in a note on Wednesday.
Households are not yet facing a shortage of cooking fuel, but prices are rising. Many hotels and restaurants in the country that use commercial LPG cylinders are facing closure as supplies are diverted to households.
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India’s “Goldilocks story of strong growth and low inflation” continues under the new GDP and CPI series, but is “challenged by high oil prices and fuel shortages,” global brokerage Nomura said in a note on Wednesday.
He added that the “soaring oil prices” caused by the turmoil in the Middle East is likely to curb the Reserve Bank of India’s dovish stance. The report stated, “Going forward, policy (interest rates) is expected to remain unchanged.”
World oil prices have risen sharply since the start of the Iran war between the US and Israel, with Brent crude reaching $100 per barrel earlier today.
