India’s March Retail Inflation Ticks Higher to 3.40%; Stays Below RBI’s 4% Medium-Term Target

India’s annual retail inflation, measured by the Consumer Price Index (CPI), rose to 3.40% in March 2026, up from 3.21% in February. Provisional data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday indicates that rural inflation stood at 3.63%, continuing to outpace urban inflation, which was recorded at 3.11%. The Consumer Food Price Index (CFPI) also saw an uptick, coming in at 3.87% for the month.

Fuel and Food Segments Drive Monthly Increase

The acceleration in the headline rate was largely influenced by the fuel and light category and steady pressures in the food basket. Specifically, the data reflects the impact of the ₹60 hike in domestic 14.2 kg LPG cylinders and the ₹114.50 increase in commercial cylinders that became effective on March 7. While housing inflation remained moderate at 2.11%, the personal care and miscellaneous goods segment recorded a significant rise of 18.65%, primarily driven by the surge in gold and silver jewellery prices.

RBI Policy

Despite the marginal rise, the 3.40% print remains below the RBI's medium-term target of 4%. In the recent monetary policy announcement, the RBI maintained its key repo rate, citing the need to keep inflation aligned with the 4% target on a durable basis. Government officials have noted that while global energy volatility persists, domestic retail prices for petrol and diesel have been cushioned by prior tax adjustments, helping maintain the CPI within the 2-6% statutory tolerance band.

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