Inflation Outlook: Why India Starts Strong Despite Oil Shock

Will rising oil prices derail India’s inflation story? Aurélien Kruse says not so fast. India entered the year with inflation below 2%, backed by credible macro management and strong anchoring of expectations — a key cushion against shocks. overnment action to limit the pass-through of global crude prices into pump prices has also helped keep inflation in check. But here’s the big risk: if higher oil prices are gradually passed on to consumers, inflation could rise more sharply than food pressures. The World Bank currently assumes crude averaging $90-100 per barrel, with easing in the second half. For now, inflation risks remain contained — but the oil wildcard isn’t going away.