India's retail inflation for April rose to a 13-month high of 3.48 percent, while wholesale inflation more than doubled to 8.3 percent. The increases are driven mainly by higher fuel and food costs amid the ongoing conflict in the Middle East.
India’s April retail inflation stood at 3.48 percent, up slightly from 3.4 percent in March, according to official data. Wholesale inflation surged to 8.3 percent from 3.88 percent over the same period, marking a 42-month high.
Fuel and power prices led the wholesale increase, climbing 24.71 percent, with petroleum and natural gas prices jumping 67.2 percent. Union Petroleum Minister Hardeep Singh Puri noted that public sector oil companies have absorbed nearly 30,000 crore rupees in monthly under-recoveries since the U.S.-Israeli conflict with Iran began.
Food prices also contributed, with the Consumer Food Price Index rising to 4.2 percent. Commercial LPG cylinder prices have increased by 850 to 1,000 rupees since the conflict started. Prime Minister Narendra Modi urged restraint on wedding spending and foreign travel while the government raised import duties on gold and silver. The rupee has fallen 8.5 percent against the dollar in the past two and a half months.
The Reserve Bank of India now faces pressure to act within its 2 to 6 percent inflation band as upstream costs continue to build.
