As we move into the second half of the fiscal year, the Reserve Bank of India’s (RBI) forecast of a 4.5 per cent average inflation rate brings some optimism. Easing crude oil prices are expected to provide a cushion, but the persistence of food price volatility casts a shadow over the inflationary outlook. While the RBI remains hopeful that the vegetable price shocks, which have characterised the first quarter of this fiscal year, may reverse, the risks associated with food inflation are far from over.

Food prices have long been a key driver of inflation in India, as they account for nearly half the retail inflation basket. The August inflation print of 3.65 per cent, though only slightly higher than the previous month, was largely driven by rising food prices, particularly vegetables. Given this context, it becomes evident that food inflation is not just an economic concern, but also a........

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