Crisil Forecasts India Inflation Rise

S&P Global — CRISIL Ratings has released a report forecasting that India's consumer inflation is expected to increase to 4.3% in the financial year 2027, up from an estimated 2.5% in the current financial year. This rise is primarily attributed to the normalization of food inflation from current low levels, driven by a low base effect. However, the impact of this increase is expected to be mitigated by a reduced weight of food in the new Consumer Price Index (CPI) series, which has declined to 36.75% from 45.86%. Non-food and core inflation are anticipated to help restrain the overall rise in consumer inflation, with the weight of the core CPI index increasing to 57.89%. Despite a sharp spike in Gold and Silver inflation in the first nine months of fiscal 2026, core inflation is likely to remain moderate in fiscal 2027 due to a high base and benign global oil and commodity prices. This inflation outlook is expected to allow the State Bank of India's Monetary Policy Committee to maintain its pause on the repo rate and focus on the transmission of the 125 basis points rate cut carried out in calendar year 2025.