India March retail inflation rises to 3.40 per cent, stays below estimates

India’s retail inflation rose to 3.40 per cent year-on-year in March 2026, up from 3.21 per cent in February, but came in below market expectations, suggesting price pressures remain contained even as food costs firmed up, government data showed on Monday.

A Reuters poll had projected inflation at 3.48 per cent for the month.

The Consumer Price Index (CPI), based on the revised 2024 base year series, indicates a gradual firming in prices but continues to remain below the Reserve Bank of India’s medium-term target of 4 per cent.

Food inflation, measured by the Consumer Food Price Index (CFPI), rose to 3.87 per cent in March compared with 3.47 per cent in February, underlining persistent pressure in household food items. Rural food inflation was higher at 3.96 per cent, while urban food inflation stood at 3.71 per cent.

At the broader level, rural inflation came in at 3.63 per cent, outpacing urban inflation at 3.11 per cent, highlighting continued divergence in price pressures between rural and urban consumption baskets.

Housing inflation was recorded at 2.11 per cent during the month, while other core components showed mixed trends under the expanded consumption basket.

The March data marks the third release under the new CPI series with 2024 as the base year, which has expanded the number of items included in the inflation basket to better capture shifts in consumption patterns across goods and services.

Despite global volatility in energy markets linked to developments in West Asia, domestic inflation remained broadly stable. Economists have noted that while food inflation has edged higher, overall price pressures are still being contained by supply-side factors.