In a detailed analysis, the Economic Survey 2026 reveals that India’s retail inflation will see a marginal uptick in FY27 over FY26, but within comfortable limits. The current fiscal’s softening trend positions it snugly in RBI’s 4% target with flexibility. RBI forecasts 2% for FY26 as of late 2025, IMF 2.8%, thanks to subdued food costs.
Yet, FY27 risks intensify from metal markets. Demand for copper, aluminum, and iron is exploding amid infra boom, renewable energy push, and digital infrastructure needs, while supply lags. Result: Higher input costs rippling through industry and building sectors.
Last year’s food price plunge, courtesy of plentiful rains, ample water storage, and strong yields, created an unusually low base. As this effect wanes, inflation rebounds inherently. Further softening in foods looks improbable; normalization will add upward pressure.
Imported pressures mount from soaring precious metals and currency weakness. Ongoing supply management helps, but expect elevated food inflation. The document stresses statistical base impacts and structural shifts, urging sustained policy focus to safeguard consumer wallets and economic momentum.