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New Delhi, India | April 14, 2026
Crisil report says inflation remains stable for now, but risks may rise if West Asia conflict continues
Energy Price Surge Yet to Fully Impact Inflation
Despite a sharp rise in global fuel prices triggered by tensions in West Asia, India’s retail inflation has shown only a mild impact so far, according to a report by CRISIL.
The report highlights that even after a month of escalating geopolitical conflict, inflationary pressures remain contained.
Brent Crude and Gas Prices Spike
Brent crude prices, which serve as a global benchmark, surged nearly 45% in March, while international natural gas prices jumped about 69% compared to February.
However, the transmission of these global price shocks to India’s domestic inflation has remained limited.
India’s Inflation Remains Stable
India’s Consumer Price Index (CPI)-based inflation rose slightly to 3.4% in March, compared to 3.2% in February, mainly due to increases in food and fuel prices.
Core inflation, which excludes volatile items like food and fuel, stayed stable at 3.7%, indicating that broader price pressures are still under control.
Government Measures Cushion Consumers
The report credits government interventions for shielding consumers:
- Petrol and diesel prices largely unchanged
- Excise duty cuts announced in March
- Controlled pass-through of global fuel prices
These steps helped prevent a sharp spike in retail inflation despite rising global costs.
Food Inflation Shows Mixed Trends
Food inflation trends remained uneven:
- Decline (Deflation): Cereals and pulses
- Increase: Vegetables, meat, fish, edible oils
- Rising costs: Ready-made food due to expensive spices
Fuel-related costs such as LPG and piped natural gas also contributed to inflation, while electricity prices remained in deflation.
Future Risks: Conflict and Weather
Looking ahead, CRISIL projects:
- Average inflation: 4.5% in FY2027
- Possible rise: 4.7% if conflict persists
Key risks include:
🌍 Geopolitical Tensions
A prolonged West Asia conflict could keep energy prices elevated, eventually increasing transport and cooking fuel costs.
🌧️ Weather Concerns
The India Meteorological Department has forecast a below-normal monsoon (92%) with possible El Niño conditions, raising concerns about food inflation.
While India has managed to contain the immediate impact of global fuel price shocks, the situation remains uncertain. Sustained geopolitical tensions and adverse weather conditions could push inflation higher in the coming months, making policy responses crucial.
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