According to the report, inflation trends in the coming months will largely depend on three major factors: the extent to which higher energy prices are passed on to retail consumers, the progress in area coverage under summer crops, and any major negative movement in individual inflation components.
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“We believe the trajectory of future inflation will be shaped by three factors — the pass through of higher energy prices to retail prices, progress of area coverage under summer crop, which as of May 08 is showing a reduction in 3 lakh hectare and any large individual inflation movement on the negative side,” the report stated.
India’s Consumer Price Index (CPI) inflation rose marginally to 3.48 per cent in April 2026 from 3.40 per cent in March 2026.
However, despite global uncertainties and geopolitical tensions, the report retained its CPI inflation forecast for FY27 at 4.5 per cent.
The report noted that one of the key areas of interest in April’s inflation data was the possible impact of the West Asia conflict on imported inflation and supply chains.Also Read | India raises gold, silver import duty to 15% to curb imports, support rupee amid West Asia crisis
However, it observed that imported inflation, which carries a weight of 21.84 per cent in the CPI basket, slightly eased to 6.34 per cent in April 2026 from 6.49 per cent in March 2026.
The weighted contribution of imported inflation also remained stable at 1.42 per cent in April 2026.
“Despite exchange rate fluctuations and external shocks like supply chain disruptions, the imported inflation has not increased but decelerated slightly,” the report noted.
Within the CPI basket, inflation in restaurants and accommodation services witnessed a significant increase, which the report linked to the impact of LPG shortages.
At the same time, softening gold and silver prices helped ease inflationary pressure in the personal care division. The report stated that the decline in precious metal prices led to a nearly 100 basis point decline in inflation in that category.
The report suggested that while retail inflation currently remains under control, future price trends will remain closely linked to global energy markets, supply chain conditions and domestic agricultural progress.