The Indian Ministry of Finance stated that retail inflation may accelerate due to insufficient monsoon rainfall and rising fuel prices.

The Indian Ministry of Finance released a report on Saturday stating that the recent increase in fuel prices, inadequate monsoon rainfall compared to previous years, and disruptions in energy supply due to ongoing conflicts in the Middle East could lead to a rise in retail inflation in India. The report noted that the duration of the disruption in the Strait of Hormuz remains the "most critical factor" affecting India's external economy and inflation outlook. With sharp increases in upstream price pressures and recent fuel price hikes, it is expected that the rising costs of transportation, energy, and food will gradually transmit to retail inflation in the coming months. The report also pointed out that the significantly reduced rainfall, combined with the current geopolitical situation, could lead to higher food prices, weakening rural demand and overall economic growth.