India’s February Inflation Rises to 3.21% as Oil Risks Loom

India’s annual consumer price inflation accelerated to 3.21% in February, up from 2.75% in January, according to official data. Despite the increase, the reading remains comfortably within the Reserve Bank of India’s (RBI) target range of 2% to 6%.

The latest data indicates that price pressures in the economy remain relatively contained. However, the outlook is being closely watched as global energy prices rise. Higher crude oil prices, driven partly by geopolitical tensions, could feed into domestic fuel and transportation costs in the coming months.

India is heavily reliant on imported crude oil, making the economy particularly sensitive to movements in global energy markets. A sustained increase in oil prices could push up input costs across industries and eventually translate into higher consumer prices.

For now, economists expect the RBI to maintain a wait‑and‑see approach. The central bank kept its benchmark repo rate unchanged at 5.25% during its February policy meeting and maintained a neutral stance, as inflation remains within its tolerance band while growth conditions remain supportive.