--- title: "Impacted by US-Iran Situation, India's March CPI Rises 3.40% YoY; Energy Cost Pressures Emerge" type: "News" locale: "en" url: "https://longbridge.com/en/news/282568402.md" description: "India's Consumer Price Index rose 3.40% year-on-year in March, up from 3.21% the previous month. The pass-through effect of energy prices is gradually becoming apparent; bond markets reacted flatly with benchmark 10-year government bond yields rising to 6.95%. High oil prices have begun transmitting to certain sectors, and inflation for the current fiscal year is projected at 4.6%. With high dependence on Middle Eastern energy, India faces external risks. Food prices increased 3.87% year-on-year, sparking concerns over forecasts of below-normal monsoon rainfall. The central bank maintained interest rates unchanged, leaving room for future policy adjustments" datetime: "2026-04-13T15:57:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/282568402.md) - [en](https://longbridge.com/en/news/282568402.md) - [zh-HK](https://longbridge.com/zh-HK/news/282568402.md) --- # Impacted by US-Iran Situation, India's March CPI Rises 3.40% YoY; Energy Cost Pressures Emerge India's March inflation data showed a moderate increase, with initial energy shocks but overall controllability. The Ministry of Statistics and Programme Implementation released data on Monday showing that **the Consumer Price Index rose 3.40% year-on-year in March, higher than the 3.21% recorded the previous month**, aligning with the median market expectation. This marks the first full monthly data since the outbreak of the Middle East conflict, **with the pass-through effect of energy prices gradually becoming apparent**. Bond markets reacted flatly, with the country's benchmark 10-year government bond yield rising by 4 basis points to 6.95%. Reserve Bank of India Governor Malhotra stated last week that **high oil prices have already begun transmitting to certain sectors, projecting inflation for the current fiscal year to reach 4.6%, exceeding the midpoint of the central bank's target range**. ## High Dependence on Middle Eastern Energy Fuels Inflation Concerns in India **India is one of the economies globally most dependent on Middle Eastern energy supplies**, importing approximately 90% of its crude oil and over half of its liquefied petroleum gas, facing significant external risk exposure amid the current Middle East conflict. Since the outbreak of the Middle East conflict, global fuel supplies have been continuously disrupted, driving oil prices sharply higher. On Monday, following the collapse of weekend peace talks, an announcement was made to blockade the Strait of Hormuz, exacerbating market concerns about the sustainability of supply disruptions. International oil prices subsequently broke through $100 per barrel again. **Regarding food prices, they rose 3.87% year-on-year in March**. Food accounts for approximately 37% of the Indian consumer price basket, making it a key component influencing overall inflation trends. Meanwhile, **market concerns are growing over forecasts of below-normal monsoon rainfall this year, as farmers, already under pressure from rising input costs due to the Middle East conflict, may face greater challenges**. Currently, the Indian government and enterprises have partially absorbed the impact of rising crude oil prices, with retail fuel prices remaining unchanged. However, HDFC Bank economist Sakshi Gupta pointed out that **although the current "pass-through of energy costs to retail inflation remains limited," if supply disruptions persist and energy prices remain high, "producers, facing sustained pressure on profit margins, may ultimately pass these costs on to consumers"**. ## Central Bank Holds Steady, Policy Space Remains The Reserve Bank of India maintained interest rates unchanged last week, adopting a cautious and watchful stance toward the economic impact of soaring oil prices. Gupta stated that **the data released on Monday indicates that the Indian central bank "still has ample policy space before shifting to a hawkish stance or considering tightening policies"**. Analysts generally agree that while current inflationary pressures have risen, they do not yet constitute an urgent signal for policy tightening. The key variable lies in the trajectory of the Middle East situation—if global supply chains cannot be restored, inflation expectations will rise further, placing greater tests on the central bank's policy direction. Risk Disclosure and Disclaimer Investment involves risk; caution is advised. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions presented herein align with their specific circumstances. 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