\n<\/p>\n
A laborer loads consumer goods onto a supply cart at a wholesale market in Kolkata, India, on November 11, 2024.<\/p>\n
Nurphoto | Nurphoto | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
India’s consumer inflation continued to ease in June, hitting a lower-than-expected 2.10%, government data showed on Monday.<\/p>\n
The headline inflation rate extended its slide after dropping to a more than six-year low in May as growth in food prices continued to decline. Economists polled by Reuters had forecast June inflation at 2.5%.<\/p>\n
The consumer price index dropped for an eighth straight month in June.<\/p>\n
Food inflation came in at\u00a0-1.06%\u00a0in June, compared with 0.99% in May.<\/p>\n
Inflation data offers more room to the Reserve Bank of India to continue relaxing its monetary policy, after its outsized rate cut of 50 basis points in May.<\/p>\n
RBI Governor Sanjay Malhotra said in <\/a>May that record wheat production and a higher harvest of key pulses in the spring crop season “should ensure adequate supply of key food items,” raising the prospects of a further decline in food inflation.<\/p>\n “Aided by a good weather outcome, we expect inflation to average about 2.5% over the next six months. A high base over the last three years and strong cereal production will help keep food inflation lower for longer,” HSBC said in a note on June 30.<\/p>\n “A good monsoon will help contain inflation, boost real wages, and raise the purchasing power of informal sector consumers,” HSBC said.<\/p>\n The increase in domestic consumption would accelerate India’s economy after it posted a faster-than-expected growth of 7.4% in the quarter ended March.<\/p>\n Malhotra, however, has warned that the country needs to be watchful of weather-related uncertainties, as well as concerns around tariffs and their impact on global commodity prices.<\/p>\n India has been negotiating with the U.S. to strike a trade deal before President Donald Trump’s tariff deadline of Aug. 1, failing which the country would invite import duties of 26%.\u00a0<\/p>\n Indian media reported<\/a> last week that a trade delegation was expected to travel to Washington for talks, after Trump restarted sending out tariff letter to countries early last week.<\/p>\n New Delhi earlier this month proposed retaliatory duties against the U.S. at the World Trade Organization, Reuters reported,<\/a> saying Washington’s 25% tariff on automobiles and some auto parts would affect $2.89 billion of India’s exports.<\/p>\n<\/div>\n<\/div>\n\n
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