India’s inflation risk shifts from crude oil to the monsoon as May CPI rises to 3.93%

India’s inflation risk is increasingly tied to domestic monsoon conditions rather than international crude oil, after retail inflation rose to 3.93% in May from 3.48% in April. The Reserve Bank of India has raised its FY27 inflation forecast to 5.1% from 4.6% amid higher energy costs and uncertainty. While easing Middle East tensions have helped oil prices retreat, a weak monsoon could lift food prices and keep inflation firm, limiting room for rate cuts.