New Delhi: As the West Asia crisis continued to impact food and fuel prices, retail inflation increased to 3.4% in March, a figure that is highest in 13 months, as per official data, reported Deccan Herald.

Similarly, food inflation increased rose to 3.87% during March, with price rise in rural areas becoming a matter of concern. Rural food inflation rose to nearly 4%, with the March inflation being the highest in the financial year 2025-26. Earlier, the figure was 3.21% in February and 2.74% in January.

The rise in retail inflation was driven primarily by food, electricity, gas and other fuels groups. In the aftermath of the surge in crude oil prices in international markets due to the West Asia crisis, prices of liquefied petroleum gas (LPG), industrial diesel and premium petrol increased in March.

Meanwhile, exchange rate fluctuations, high oil prices and other external shocks due to the West Asia conflict, resulted in imported inflation rising to 6.49%.

According to analysts, the retail inflation is likely to hit around 4% in April and remain elevated in the coming months.

"The impact of the unrest in West Asia will continue to feed into prices of several items such as alternate fuels, airfares (owing to higher ATF prices), restaurants (owing to higher commercial LPG prices), which along with rising input prices is likely to harden the April 2026 headline inflation print,” Aditi Nayar, chief economist, ICRA, told Deccan Herald.

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