India’s wholesale price inflation (WPI) rose to a 12-month high of 3.88% in March from 2.13% in February. This positive rate of inflation in March 2026 is mainly due to the increase in prices of crude petroleum and natural gas, other manufacturing, non-food items, basic metals and food items.
In a Reuters survey of economists, WPI based inflation was estimated to increase to 3.04% annually. According to government data released on Monday, India’s retail inflation increased from 3.21% in February to 3.4% in March on a year-on-year basis. This happened because geo-political tension and supply-side pressure from the Middle East had started affecting prices.
fear of middle east war
These latest inflation figures have come in the background of increasing geo-political uncertainty related to Iran, Israel and America, which has increased concerns about disruption in global oil supply. Tensions increased after the US imposed a naval blockade of Iranian ports, destabilizing energy markets and intensifying regional tensions.
This move has put pressure on the Strait of Hormuz, which is a critical route for global oil shipments. Washington said the restrictions would target ships linked to Iranian maritime activities, while transit to non-Iranian ports would still be allowed to minimize disruption on a larger scale.
RBI MPC on inflation
In its April Monetary Policy Committee (MPC) meeting, the Reserve Bank of India said that although India’s economic fundamentals remain strong, external shocks could intensify if global tensions persist or escalate.
The central bank’s rate-setting committee has estimated CPI inflation at 4.6% for FY27, with the quarterly estimates being 4.0% in Q1, 4.4% in Q2, 5.2% in Q3 and 4.7% in Q4. Core inflation has been estimated at 4.4%. The central bank also said that this is the first time that it has given such detailed quarterly details, which shows the increasing focus on transparency and suggestions from stakeholders.
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