India's June retail inflation hits 4.38%, breaching RBI target

India’s consumer price index rose to 4.38% year‑on‑year in June 2026, up from 3.93% in May, marking the first breach of the Reserve Bank of India's 4% medium‑term target in 16‑17 months. The jump was led by food inflation at 5.32% and higher fuel costs, while jewellery prices surged – silver jewellery up 133% and gold jewellery up 36%. Rural inflation registered at 4.74% versus 3.92% in urban areas. State‑level readings varied, with Telangana recording the highest at 6.36%. The increase follows a delayed monsoon, a deficit in June rainfall and heightened geopolitical tensions in the Middle East that pushed global oil prices higher. The RBI kept its repo rate unchanged at 5.25% but raised its fiscal‑year inflation outlook to 5.1% from 4.6%, prompting market expectations of a possible rate hike in the coming months.