India’s consumer inflation rises to 3.21% in February as oil risks loom
Fuel nozzles hang from a fuel pump at a fuel station in Guwahati, India, on March 11, 2026. Oil prices reversed from recent highs, falling to US$90 per barrel following US President Donald Trump’s statements on the Iran conflict. Markets remain unstable as investors monitor the evolving geopolitical situation. (Photo: David Talukdar/NurPhoto via Getty Images)
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India’s consumer inflation rose to 3.21% in February for the fourth consecutive month, from 2.75% in the previous month.
The headline inflation figure was in line with economists’ expectations for a 3.1% increase in the consumer price index, according to a Reuters poll.
Food inflation rose 3.47% year-on-year in February from 2.13% in January, India’s Ministry of Statistics and Program Implementation said on Thursday.
This is the second consumer price index read under the revised data series, with the base year changed from 2012 to 2024 to reflect changes in consumption habits.
The government said in February that the base year was changed due to “significant structural changes occurring in consumption behavior, income levels, urbanization, service sector expansion and digitalization.”
At its last monetary policy meeting on February 5, India’s central bank said it expected inflation to be 2.1% for the current fiscal year, adding that food supply prospects “will continue to be bright” in the near term.
Experts, however, said inflation will remain within the Reserve Bank of India’s target range of 2% to 6% but is unlikely to trigger policy action given the escalating conflict in the Middle East.
The coming energy crisis
The US-Israeli war in Iran has disrupted maritime traffic in the Strait of Hormuz, a key corridor for global energy trade, and threatened supplies of crude oil and liquefied petroleum gas (LPG), India’s primary cooking fuel.
Currently around 30% of India’s crude oil supply and 90% of LPG imports transit The government said in a note published on Wednesday that passage had been made through the Strait of Hormuz.
Although households are not yet experiencing a shortage of cooking fuel, prices have increased. Many hotels and restaurants in the country that use commercial LPG cylinders are in danger of closing as the supply is diverted to households.
India’s “Goldilocks narrative of strong growth and low inflation” continues under the new GDP and CPI series but is “challenged by high crude oil prices and fuel shortages,” global broker Nomura said in a report on Wednesday.
He added that “high oil prices” caused by disruptions in the Middle East would likely curb the Reserve Bank of India’s dovish tone. “We are waiting for a policy” [rate] From now on, wait,” the report said.
Global oil prices have risen sharply since the US-Israeli war began in Iran, with Brent crude hitting $100 a barrel earlier today.
