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[India's Inflation Rises Slightly Against the Trend; Gold Price Plunge Effectively Offsets Oil Price Shock] ⑴ A survey of 45 economists indicates that India's March Consumer Price Index (CPI) is expected to rise only moderately to 3.48% year-on-year, a slight increase from 3.21% in February. The approximately 11% plunge in gold prices that month partially offset the pressure from soaring fuel prices triggered by the Iran-Iraq War. ⑵ Although the US-Israel military action against Iran, which began on February 28, drove global oil prices up and led to a severe fuel shortage in India, New Delhi effectively buffered the price transmission at the retail level by reducing the consumption tax on gasoline and diesel, keeping overall prices relatively stable. ⑶ Aditya Vias, chief economist at STCI Primary Dealers, pointed out that food inflation remained benign thanks to ample supply, while the significant decline in gold prices from their highs alleviated upward pressure on core inflation. ⑷ HDFC Bank's calculations show that fuel inflation rose approximately 11% year-on-year in March, compared to only 0.1% in February. The transmission of oil prices to overall prices is expected to gradually appear with a lag. (5) Rahul Bajoria, head of India and ASEAN economic research at Bank of America Securities, emphasized that the transmission effect of rising oil prices has a time lag; even after the US-Iran ceasefire agreement was announced on Wednesday, Brent crude futures are still about one-third higher than their February levels. (6) After keeping its key policy rate unchanged as expected on Wednesday, the Reserve Bank of India raised its average inflation forecast for the current fiscal year to 4.6%, highlighting its vigilance regarding the dual risks to growth and prices. (7) Core inflation, excluding volatile food and fuel components, is expected to rise slightly to 3.53% from 3.41% in February, while the inflation rate based on the wholesale price index is expected to jump significantly from 2.13% to 3.04%. (8) Analysts believe that the sharp drop in gold prices in March stemmed from emergency selling by traders to cover margin calls in the stock market; this unconventional transmission path unexpectedly became an important buffer variable in smoothing out India's inflation readings.