The Central government adopted its inflation targeting framework in 2016, which requires the Reserve Bank of India to keep the headline inflation
India implemented its inflation-targeting framework in 2016, formally tasking the Reserve Bank of India with keeping headline inflation, as measured by consumer price inflation within a band set by the government. The framework was last reviewed in 2021.
India’s retail inflation edged up to a 11-month high of 3.2 per cent in February 2026 from 2.7 per cent in the previous month. This was due to higher food inflation which increased to 3.5 per cent in February 2026 from 2.1 per cent in January 2026. This data was before the outbreak of the Middle East conflict. So for this fiscal (April-February), the inflation has averaged 1.9 per cent. India Ratings expects March 2026 retail inflation to increase to 3.7 per cent. So far, inflation has been within the RBI’s target range.
Fuel and transport inflation has a combined weight of 14.2 per cent in overall Consumer Price Index. According to the Reserve Bank of India (RBI), a 10 per cent rise in global crude prices could result in an increase in inflation by 30 basis points.
Also read: Will rising oil prices impact India?
