India’s CPI Inflation Expected at 4% in April 2026 Despite Rising Food Price Pressures

India, May 07 : India’s Consumer Price Index (CPI) is projected to stabilize at around 4% in April 2026, though economists caution that inflation risks are increasingly skewed upward due to persistent pressure in food items and volatile global commodity trends.

A recent analysis by Bank of Baroda highlights that the Essential Commodities Index (BOB ECI) has maintained upward momentum for three consecutive months, rising 1.1% year on year in April and 0.3% sequentially the fastest monthly increase recorded since August 2025.

Food Prices Under Strain Amid Supply Disruptions

The report points to sustained inflationary pressure in key household staples such as tomatoes, onions, edible oils, and other essential kitchen items. It notes that price increases are becoming more broad-based and structurally embedded in the current cycle.

A major concern is the weakening supply chain for perishables. Arrivals of Tomato, Onion, and Potato (TOP) fell by 12.8% year-on-year in April 2026, reflecting tightening availability in key agricultural markets.

Further compounding the issue, weather warnings from the India Meteorological Department (IMD) indicate potential heatwave conditions across major producing states including Gujarat, Maharashtra, and parts of the eastern coast. This raises the likelihood of further disruptions in agricultural output in the coming months.

Global Commodity Trends Add Imported Inflation Pressure

International factors are also contributing to domestic price risks. According to World Bank assessments, inflationary pressures are no longer confined to energy markets and are increasingly spilling over into global food categories such as cereals and edible oils.

The report warns that continued geopolitical instability has prevented normalization in supply chains, increasing the risk of cost pass-through from producers to consumers. This has elevated concerns around imported inflation, particularly for India’s edible oil segment, which remains heavily dependent on global pricing trends.

Commodity-Wise Inflation Trends Show Mixed Picture

Within the BOB ECI framework, 16 out of 20 tracked commodities recorded higher inflation during April. Sharp increases were observed in tomatoes, onions, pulses, and edible oils including sunflower, mustard, and soya oil.

However, not all segments are inflationary. Potato and onion prices continue to remain in deflationary territory, while most pulses still show negative price trends, except for masoor dal, which has deviated from the broader pattern.

Core Inflation Remains Contained but Not Risk-Free

Core inflation, which excludes food and fuel, is expected to remain around 3.5% in April 2026. A narrower measure excluding items such as pan, tobacco, gold, silver, and other precious metals is projected to stay lower at approximately 1.8% to 1.9%.

Despite overall moderation, analysts caution that upward pressure could emerge from transport costs and the hospitality sector, driven by higher aviation turbine fuel (ATF) prices and increased commercial LPG cylinder rates.