India’s retail inflation registered an uptick in March as rising global energy costs and food prices, triggered largely by the ongoing West Asia crisis, began reflecting in domestic markets.

Official data showed retail inflation climbing to 3.4% in March, the highest level recorded in the last 13 months, reported Deccan Herald.

Food inflation also witnessed a noticeable rise, reaching 3.87% during the month, with rural price pressures emerging as a key concern for policymakers. Rural food inflation touched nearly 4%, marking the highest level in the financial year 2025-26. The figure had stood at 3.21% in February and 2.74% in January, indicating a steady upward trend.

The increase in overall inflation was largely driven by higher prices in food items, electricity, gas and other fuel categories. Following the spike in global crude oil prices amid tensions in West Asia, domestic prices of liquefied petroleum gas (LPG), industrial diesel and premium petrol moved upward in March, contributing to the inflationary pressure.

External factors also played a significant role, as exchange rate volatility and expensive oil imports pushed imported inflation to 6.49%. Economists believe that inflationary pressures may persist in the coming months as global uncertainties continue to affect supply chains and energy markets.

“The impact of the unrest in West Asia will continue to feed into prices of several items such as alternate fuels, airfares (owing to higher ATF prices), restaurants (owing to higher commercial LPG prices), which along with rising input prices is likely to harden the April 2026 headline inflation print,” Aditi Nayar, chief economist, ICRA, told Deccan Herald.

With analysts projecting retail inflation to approach 4% in April, the trajectory of fuel prices and global geopolitical developments is expected to remain a key factor influencing India’s inflation outlook in the near term.