Floods, heavy rains are unlikely to push India’s inflation above

Large sections of Indian agricultural land were affected by floods and heavy showers, with the key agricultural state of Punjab encountered the worst floods in 40 years.

While the cultures were damaged, analysts predict that the overall impact on inflation on the financial year of 2026 will not be serious enough to promote it past the Central Bank’s average target – the reserve bank of India’s consumers is 2% to 6% to 6%

It is expected that a limited impact on the production of cereals and sufficient shares will keep food inflation soon, – the report said on Monday, adding that it is “not too experienced on the basis of inflation.”

Breaking its nine-month decline, consumer inflation increased to 2.1% in August, with 1.5% in July due to the increase in food prices compared to the previous month led by vegetables, food, eggs, fish, meat and fruits.

The overall influence of continuous rains is limited to inflation from a higher base, but it may be greater if the rains continue during the harvest season, the Bank of America said on Friday.

Analysts, including Bofa, are waiting for a decline in the tax on goods and services, which will come into force on September 22, will retain inflation below.

JustifyAccording to floods, 3 lacquer hectares of agricultural land were damaged, and half a million people in 23 districts affected the flood.

Other states affected by heavy rains include Himachal -Pradesh and Jamma and Kashmir in the north and Telangan in the south.

Extra rains in August via Punjab, Rajastan and Telangan “Create concern about cultures in their growth stages,”-warned on Saturday’s Saturday’s report on Saturday on Saturday.

Until now, benign inflation has allowed India in the Central Bank to reduce rates by pushing the growth of domestic growth at a time when the country is facing trades borrowed by US tariffs by 50% on export.

Sunday, Indian meteorological department They said the conditions favorable for the cancellation of the monsoon from Punjab and other states over the next three days.

But, it is expected, the North -Eastern India and parts of Maharashtra, another important state for agricultural products, will see heavy precipitation by Wednesday, IMD said.

“Excess precipitation in some parts of the country (in particular, Punjab) has caused some concerns about inflation pressure, but all-Indian daily data on food products does not yet indicate a significant impact during September,” the Citi study said.

Citi reduced its average CPI forecast for India for the financial year, which ended in March 2026 to 2.9% from 3.2% earlier.

“India testifies to a very widespread inflation decline,” City said.

Since inflation is expected to remain muted, and the government will focus on growth to mitigate the impact of tariffs on the US, the analyst expects the opportunity to further weaken the monetary policy.

“We believe that the RBI will re -facilitate the rate of 4Q25, taking rap to 5.25%,” HSBC said.