Food, fuel prices: India’s wholesale, retail inflations hit 9.9%, 4.8%

New Delhi: India’s inflation battle is showing fresh signs of strain, with rising food costs pushing retail inflation to an eight-month high in August and adding pressure on the Reserve Bank of India (RBI) ahead of its next monetary policy review, The Times of India reported.

Consumer Price Index (CPI)-based retail inflation rose to 4.8% year-on-year in August, from 4.5% in July, according to data released by the National Statistics Office (NSO). The reading remained above the RBI’s 4% target for the third consecutive month, though it stayed within the central bank’s 2%-6% tolerance band.

Food inflation emerged as the main driver, accelerating to 6% in August from 5.5% a month earlier. Rising energy costs following renewed hostilities in West Asia also began feeding into consumer-facing sectors. Inflation in restaurant services climbed to 8.4%, up from 7.7% in July, while inflation in transport services increased to 4.6%, up from 4.4%.

The pressure was more pronounced in rural areas, where retail inflation rose to 5.2% from 4.8%. Urban inflation also edged higher, reaching 4.3% against 4% in July.

Wholesale inflation provided little relief, with the Wholesale Price Index (WPI)-based factory-gate inflation increasing marginally to 9.9% from 9.8%, supported by higher fuel and manufactured goods prices.

Economists are increasingly flagging risks from elevated crude prices, uncertainty around oil shipments through the Strait of Hormuz and below-normal rainfall. A prolonged inflationary surge could strengthen the case for an RBI rate increase, with expectations of a December hike potentially moving forward to October 2026 if fuel prices rise further.