India's retail inflation is anticipated to rise to 3.4% in March 2026, slightly up from 3.2% in February, according to a Mint poll of 16 economists. This increase marks a 12-month high, primarily driven by a fading base effect and rising prices in non-food sectors. Despite the rise, inflation remains below the Reserve Bank of India's (RBI) medium-term target of 4%. The impact of the ongoing conflict in West Asia, which began on February 28, has led to increased prices for liquefied petroleum gas (LPG) and other energy sources, further complicating the inflation outlook. Economists have noted that while food inflation is expected to remain steady, the overall Consumer Price Index (CPI) is likely to reflect the pressures from rising energy prices and crude oil costs. The RBI has adjusted its inflation projections for the second quarter to 4.4%, indicating concerns about the inflationary impact of the conflict and potential El Niño effects. Furthermore, the RBI has revised its GDP growth projections downwards, expecting a slowdown to 6.9% in FY27 from 7.6% in FY26. Despite these inflationary pressures, analysts from Nomura believe the RBI will maintain current interest rates through the end of 2026 unless core inflation exceeds 5% sustainably.