India's retail inflation climbed to 3.40% in March 2023, up from 3.21% in February, primarily due to rising prices in food and beverages, as well as escalating energy costs influenced by the ongoing conflict in West Asia. This inflation rate aligns with the consensus forecast from 16 economists surveyed by Mint. Notably, food inflation increased to 3.87% from 3.47% in February, while housing inflation remained relatively stable at 2.11%. Despite the rise in inflation, it remains below the Reserve Bank of India's (RBI) medium-term target of 4%. The RBI recently opted to keep its key policy rate unchanged at 5.25%, indicating a cautious approach as it assesses the economic impact of rising oil prices. The geopolitical tensions have also contributed to a depreciation of the Indian rupee and heightened stagflation risks. Looking ahead, India's economic growth is expected to slow, with projections of 7.6% growth for the fiscal year 2025-26, while the World Bank estimates a growth rate of 6.6%.