Is India's inflation targeting too rigid for this oil-shock climate?

India's inflation-targeting framework has successfully reduced inflation but may be too rigid in the current volatile economic climate. The reliance on past inflation data can lead to pro-cyclical monetary policy, exacerbating business cycles. High real interest rates during banking crises have hindered growth, and recent aggressive rate hikes may have been premature. With rising oil prices due to geopolitical tensions, there is a risk that the Reserve Bank of India may react inappropriately to reported inflation, potentially harming economic stability.