New Delhi, April 15: Wholesale inflation in India saw a significant spike in March due to rising fuel prices, prompting economists to suggest that the central bank may maintain steady interest rates in the near future. This information was shared by economists on Wednesday.
Senior economist Rahul Agarwal from ICRA noted that the increase in wholesale inflation was broad-based, with notable rises in the prices of crude petroleum and natural gas, along with fuel and energy costs.
He further explained, “In March 2026, the core inflation rose by 175 basis points compared to February 2026, with 150 basis points attributed to these two categories.”
Agarwal also mentioned that the food inflation rate remained stable at 1.8 percent in March, while non-food items saw wholesale inflation rise to 3.7 percent, the highest level in 41 months, up from 3.3 percent in February.
On a sequential basis, the core index increased by 0.7 percent in March, consistent with the average of the previous three months.
The economist indicated that globally high energy prices, along with increased shipping, freight, and input costs, could lead to a rise in import costs. This may result in further increases in wholesale inflation in April.
Rajni Sinha, chief economist at Care Ratings, expressed similar concerns, stating that the latest wholesale inflation data reflects the more severe impacts of the West Asia crisis, showing a sharper increase compared to retail inflation.
She noted, “This gap is due to the sharp rise in wholesale diesel and other commercial fuel prices, while retail petrol and diesel prices have remained unchanged.”
Sinha reported that refiners raised wholesale diesel prices by over 25 percent in March, while domestic gas cylinder prices increased by ₹60 and commercial cylinder prices rose by a total of ₹310.
She added that despite a swift resolution to the West Asia crisis, global crude oil prices are expected to average between $85 and $90 per barrel in the fiscal year 2027.
“The burden of high global crude oil prices will impact families, the government, and oil marketing companies,” she stated.
Sinha also mentioned that due to strong refining margins, oil marketing companies could withstand crude oil prices up to $100-105 per barrel. She estimated that assuming crude oil prices at $90 per barrel, wholesale inflation could average around 5 percent in the fiscal year 2027.
On the monetary policy front, she indicated that the Reserve Bank of India is likely to maintain the status quo on policy rates.
“Considering growth-related concerns, the RBI is unlikely to rush into changing interest rates,” she said.
She further noted that if the growth outlook falls significantly below long-term potential, the central bank may consider rate cuts by the end of the fiscal year.
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