Floods, heavy rains unlikely to push India’s inflation higher
TOPSHOT – A female farmer, in a village near the Ravi River Ajnala on September 5, 2025, about 28 km away from Amritsar, killed at least 29 km away, and affected by more than 250,000 people last month, affecting more than 250,000 people from the worst raid, the heavy rains in the village near Ajnala.
Narinder Nanu | AFP | Getty Images
The large areas of Indian agricultural lands have been influenced by flood and severe torrential rainfall, and Punjab’s lock agricultural situation faced the worst floods in 40 years.
Although crops have been damaged, analysts estimate that the overall effect on inflation for the 2026 fiscal year will not be severe enough to cross the mid -point target of the central bank – India Consumer Inflation Target Bank is 2 to 6%.
HSBC, cereal production and adequate stocks are expected to control food inflation in the near future.
Nine -month decline tendency, consumer inflation in August, vegetables, edible oil, eggs, fish, meat and fruits led by the previous month due to the increase in food prices increased from 1.5% to 2.1%.
In a report published on Friday, the Bank of America Securities are limited to inflation due to a higher base of the continuous rains, but it may be larger if the rains continue to harvest.
Analysts, including Bofa, expects the cutting of goods and services taxes that will enter into force as of September 22nd to keep inflation low.
Reported3 Lakh acres of agricultural lands were damaged and half a million people in 23 regions were affected by floods.
Among the other states affected by heavy rains are Himachal Pradesh and Jammu & Kashmir in the north of the country and Tahangana in the south.
In August, the extreme rains in Punjab, Rajasthan and TaLangana warned S&P global -assisted research and risk consultancy service company Crisil in a report on Saturday.
So far, benign inflation has allowed India’s Central Bank Chamber to reduce its rates and encouraged internal growth at a time when the country was facing trade concerns that owed the US to 50% open tariffs in its exports.
Sunday, Indian Meteorology Department He said the conditions were suitable for the withdrawal of the monsoon from Punjab and other states in the next three days.
However, some parts of Maharashtra, another important state for Northeast India and Farm products, are expected to see heavy rainfall until Wednesday.
“In certain parts of the country (especially Punjab) caused some concerns about inflationary pressures in certain regions of the country (especially Punjab), but all Indian daily data on foodstuffs have not yet had a significant impact for September.” He said.
The Citi reduced the average title CPI forecast for the financial year ended in March 2026 from 3.2% to 2.9%.
“India witnesses a very large -based inflation.” He said.
Inflation is expected to remain silent, and the government focuses on directing growth to reduce the impact of US tariffs, waiting for the analyst’s monetary policy to make it easier.
HSBC, “RBI’nın 4Q25 will make the ratios easier once again, and the repo ratio to 5.25%.” He said.
