India July consumer inflation rises above RBI target as food prices climb

A Reuters poll of 40 economists forecast that India's consumer price index rose to about 4.5% in July, marking a second consecutive month above the Reserve Bank of India's 4% medium‑term target. The increase was driven primarily by higher food prices, which were pressured by uneven rainfall that reduced agricultural output. Indian households spend more than 40% of their budgets on food.

The RBI kept its policy rate unchanged, noting weather‑related risks and global energy market uncertainty. Core inflation, which excludes food and fuel, was expected around 4.1%, while wholesale price‑index inflation stayed near 10%. The central bank projects average inflation of 5.0% for the current financial year. Fuel price volatility persisted due to the U.S.–Israeli conflict with Iran, but domestic retail fuel prices remained stable.

Analysts highlighted that, despite the rise, inflation stayed within the RBI's 2‑6% tolerance band, limiting immediate policy shifts.