March CPI inflation rises to 3.40% as fuel, housing push prices up
CPI inflation inched up to 3.40% in March, driven by rising imported costs and pressure from fuel and housing segments.
CPI inflation inched up to 3.40% in March, driven by rising imported costs and pressure from fuel and housing segments.
Strong macro fundamentals and low inflation place India in a “Goldilocks” zone. Valuations near long-term averages signal potential for above-average market returns.
The Reserve Bank of India’s decision to hold rates signals a cautious, hawkish undertone amid global uncertainties, even as it maintains policy stability.
After a soft start, India’s 10Y yield turned sticky in H2FY26 amid rising supply concerns and global geopolitical tensions. Oil shocks and volatile capital flows have added to upside risks, keeping yields elevated.
The RBI is expected to hold the policy repo rate unchanged at 5.25% and keep the stance as neutral.
Despite strong macro fundamentals and ample forex reserves, rising volatility and structural pressures call for calibrated RBI intervention to stabilise the rupee.
While all-India core inflation only increased by 5 bps to 3.40% in Feb’26, the state-wise trend is quite divergent.
For the full year, GDP growth is estimated at 7.6%, supported by robust expansion in the manufacturing sector.
India is updating its GDP base year from 2011-12 to 2022-23, with the new series scheduled for release on February 27, 2026.
The core CPI in the new series is at 3.4% in January 2026, compared to ~4.15% going by the old series in January 2026.