India retail inflation outlook: ASSOCHAM urges RBI to hold repo rate in June 2026 review

An ASSOCHAM analysis released on Friday said India was in a stronger position to handle retail inflation than other top 10 economies. The review came as the West Asia conflict continued to unsettle trade and energy markets. ASSOCHAM also urged the Reserve Bank of India to keep the repo rate unchanged in early June 2026.

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The industry body said India’s inflation was still relatively contained. It reported inflation at 3.2 per cent in February 2026. The figure rose to 3.5 per cent in April 2026. ASSOCHAM compared this with the US, where inflation moved from 2.4 per cent to 3.8 per cent.

RBI repo rate status quo and inflation outlook

"As Indias headline inflation still prevails in the benign conditions, we suggest the RBI to maintain a status quo on repo rate in the forthcoming review of RBI monetary policy in the 1st week of June 2026,\" said Nirmal K Minda, President, ASSOCHAM. ASSOCHAM said a stable rate could support demand and avoid stress on business confidence.

\"Though some increase in headline inflation cant be ruled out, given the recent rise in energy prices, it will be a transitory phase in the inflation trajectory, and we are hopeful that inflation will return to benign territory. At this juncture, any increase in the repo rate will have a significant impact on business sentiment and the countrys demand trajectory,\" argued Minda.

RBI repo rate status quo and MSMEs support measures

ASSOCHAM recommended targeted steps for export-oriented and energy-intensive MSMEs. It asked for liquidity support, interest subvention, and moratorium measures. The suggestions were tied to the forthcoming monetary policy review in early June. The group linked these needs to higher energy costs and external disruptions.

RBI repo rate status quo and USD/INR swap auction

\"We appreciate the central banks decision to conduct a USD 5 billion USD/INR buy-sell swap auction on May 26 to inject long-term liquidity into the banking system and strengthen forex reserves,\" he said. ASSOCHAM added that such steps could improve liquidity and limit sharp exchange rate moves.

Minda said the swap auction could help contain rupee volatility under global pressure. ASSOCHAM linked recent rupee weakness to geopolitical tensions and oil price shocks. It said the measure may also support liquidity conditions as markets adjust. The group kept its focus on maintaining policy stability in June 2026.

With inputs from PTI