India

Research evidence excerpt

India

Sajjid Z Chinoy (91-22) 6157-3386 Divyanit Sood (91-22) 6157-3786 Asia Pacific Economic Research J P M O R G A Nsajjid.z.chinoy@jpmorgan.com divyanit.sood@jpmchase.com

JPMorgan Chase Bank, N.A., Mumbai Branch 17 July 2026

Toshi Jain (91-22) 6157-3387

toshi.jain@jpmorgan.com

India However, underlying inflation remained benign. Core-core

inflation eased to 0.3% m/m, sa in June (0.4% m/m, sa in

• June CPI firms but internals benign; inflation track- May) and stayed contained at 2.5%oya, suggesting limited

ing below RBI’s forecast pass-through from oil into broader prices. Food prices were

also soft, increasing 0.3% m/m, sa in June. That said, food

• Central bank expected to remain on hold at August inflation warrants close monitoring given El Niño risks: the

meeting

monsoon deficit is currently tracking ~23% below normal,

• CAD lower than expected in May; capital flows also and sowing has lagged as a result.

improve from April

• CAD expected at 0.8% of GDP in 2Q26 RBI expected to remain on hold in August

Even as headline CPI came in above expectations, the under- In 2Q26, CPI inflation averaged 3.9%oya, below the

lying components were much more benign. Core momentum RBI’s 4.2% forecast. Our 3Q26 average inflation forecast is

was soft at 0.3% m/m, sa in June, suggesting limited pass- tracking at 4.7%oya, also below the RBI’s 5.1% projection.

through from higher oil prices. While food inflation bears At the August policy meeting, with inflation running below

close monitoring given El Niño-related risks, thus far infla- the RBI’s forecast and core inflation still soft, we expect the

tion is running below the RBI’s trajectory. Accordingly, we RBI to hold rates and remain in wait-and-watch mode.

expect the RBI to hold rates at the August policy meeting and