India's retail inflation surges to 7.79% in April

India's retail inflation surged 8-year high to 7.79 per cent in the month of April, breaching the upper limit of the Reserve Bank of India's (RBI's) target range for the fourth consecutive time, according to data released by the Ministry of Statistics and Program Implementation on Thursday. The surge is largely driven by rising fuel and food prices. 

The RBI has been mandated by the government to keep retail inflation at 4 per cent with a margin of 2 per cent on either side.

The CPI-based inflation stood at 6.95 per cent in March, 6.07 per cent in February and 6.01 per cent in January. The inflation rate stood at 4.23 per cent in April 2021.

Inflation in the food basket rose to 8.38 per cent in April from 7.68 per cent in the preceding month and 1.96 per cent in the year-ago month.

The local price of oil, India's biggest import, has also been subject to upwards pressure from the roughly 4 per cent drop in the rupee this year, with Indian rupee touching record low against US dollar on Monday.

The elevated price outlook pushed the RBI - which only recently changed its focus to price stability from growth - to hike its repo rate for the first time since 2018, lifting it 40 basis points to 4.40 per cent in a surprise unscheduled meeting last week, with more expected to follow. 

The move came just ahead of the US Federal Reserve's 50 basis point rate hike later the same day.

Meanwhile, the country's industrial output, measured by the Index of Industrial Production (IIP), decelerated at 1.9 per cent in March compared to 24.2 in the same month a year earlier, NSO stated.