India's Inflation Risks Soar Amid Geopolitical Tensions and High Oil Prices

India's inflation risks have increased due to geopolitical tensions and high crude oil prices, according to the country's finance ministry. The September Monthly Economic Review stated that import costs may rise further due to these factors.

The report also warned of potential supply chain disruptions, fluctuating energy prices, and global economic uncertainty.

India began the second quarter of fiscal 2026/27 with strong domestic activity, exports, capital inflows, and foreign exchange reserves. However, the ministry cautioned that these conditions may be affected by external factors.

The Reserve Bank of India's open market operations aim to manage liquidity and prevent demand-side overheating. Despite this, retail inflation rose to 4.82% in August, with food inflation at 5.95%. Wholesale inflation accelerated to 9.92%, partly due to renewed fuel and power price pressures.