India’s average consumer price index (CPI)-based inflation is projected at 3.1 per cent for fiscal 2025-26 (FY26), according to Care Ratings. The CPI inflation eased further to 1.6 per cent in July this year, primarily driven by the deepening of deflation in the food category. The core inflation also eased to 4.1 per cent down from 4.4 per cent in June and remains at comfortable levels. India’s average CPI inflation is projected at 3.1 per cent for FY26, Care Ratings said. Though the central bank maintained policy rates in its August meeting following a front-loaded rate cut in June, the rating agency expects inflationary momentum to rise in H2 FY26 as the favourable base effect fades. Inflation in Q4 FY26 is projected to average well above 4 per cent. Though the central bank maintained policy rates in its August meeting following a front-loaded rate cut in June, the rating agency expects inflationary momentum to rise in the second half of the fiscal as the favourable base effect fades. Inflation in FY26 fourth quarter (Q4) is projected to average well above 4 per cent, and for FY27, the agency expects it to average above 4.5 per cent. It does not anticipate further rate cuts unless economic growth weakens significantly. On the external front, while global commodity prices are broadly expected to remain stable, intermittent spikes cannot be ruled out amid ongoing geopolitical tensions. Crude oil prices, which had surged due to unrest in the Middle East, have since corrected. However, concerns over potential US secondary sanctions on Russian crude could disrupt supply chains for major importers such as India and China, Care Ratings said in a release. Although the Organisation of the Petroleum Exporting Countries (OPEC) has spare capacity, global oil dynamics could shift and needs close monitoring, it added. Fibre2Fashion News Desk (DS)