India Inflation: RBI Rate Hold Advised by ASSOCHAM

New Delhi, May 22 (PTI) India is better placed to manage retail inflation among the top 10 economies, according to an analysis by industry lobby ASSOCHAM unveiled on Friday, amidst the ongoing disruptions caused by the West Asia conflict.

It further suggested the RBI to maintain the status quo on the repo rate, while introducing liquidity, interest subvention, and moratorium support measures for export-oriented and energy-intensive MSMEs in the forthcoming review of monetary policy in early June.

India's inflation stood at 3.2 per cent in February 2026 and rose to 3.5 per cent in April 2026, a 0.3 percentage-point increase. This performance is better than the significant increase in the US, where inflation rose from 2.4 per cent in February 2026 to 3.8 per cent in April 2026, a 1.4 percentage-point increase, according to ASSOCHAM.


As India's headline inflation still prevails in the benign conditions, we suggest the RBI to maintain a status quo on repo rate in the forthcoming review of RBI monetary policy in the 1st week of June 2026, said Nirmal K Minda, President, ASSOCHAM.

"Though some increase in headline inflation can't be ruled out, given the recent rise in energy prices, it will be a transitory phase in the inflation trajectory, and we are hopeful that inflation will return to benign territory. At this juncture, any increase in the repo rate will have a significant impact on business sentiment and the country's demand trajectory," argued Minda.

We appreciate the central bank's decision to conduct a USD 5 billion USD/INR buy-sell swap auction on May 26 to inject long-term liquidity into the banking system and strengthen forex reserves, he said.

According to him, the above measure will help manage liquidity conditions and stabilise rupee volatility amid global pressures and recent currency depreciation driven by geopolitical tensions and oil price shocks.