India inflation rises to 4.82% in August, strengthening case for rate hike

India's annual retail inflation accelerated to 4.82% in August, driven by price pressures beyond food and transport. This trend strengthens the case for the Reserve Bank of India to consider a rate hike at its next monetary policy meeting. Wholesale inflation also rose in August to 9.9%. Food inflation climbed to 5.95% in August from 5.52% in July, with increases in prices of ginger, onion, and garlic. Transport inflation accelerated to 4.6% in August from 4.4% in the previous month. Inflation in food-serving services rose to 8.4% from 7.7% in July. The Reserve Bank of India's Monetary Policy Committee recently kept key short-term policy rates unchanged amid inflation worries, with its mandate to keep inflation within the 2% to 6% range. One analyst expects the second quarter of fiscal year 2027 average inflation to be about 20 basis points higher than the RBI's estimate of 4.7%, and sees scope for 50-75 basis points of rate hikes by the MPC, with increased odds of an action in October.