India is in a stronger position than many of the world’s largest economies when it comes to managing retail inflation, industry body ASSOCHAM said on Friday. Amid global uncertainty caused by the ongoing conflict in West Asia, the organisation has urged the Reserve Bank of India (RBI) to avoid changing interest rates in its upcoming monetary policy review scheduled for early June.
According to ASSOCHAM, India’s inflation has remained relatively stable despite rising energy prices and global tensions. The industry body believes the RBI should maintain the current repo rate while introducing targeted relief measures for small businesses, especially export-focused and energy-intensive MSMEs.
ASSOCHAM’s analysis showed that India’s retail inflation increased only slightly from 3.2% in February 2026 to 3.5% in April 2026 — a rise of just 0.3 percentage points. In comparison, inflation in the United States jumped sharply from 2.4% to 3.8% during the same period.
The industry body also highlighted that countries such as France, Germany and Italy recorded increases of more than one percentage point in inflation between February and April. Brazil too saw a bigger rise than India, with inflation climbing from 3.8% to 4.4%.
At the same time, China, the UK and Russia showed some improvement in inflation trends, helping ease pressure caused by the war in West Asia.
ASSOCHAM President Nirmal K Minda said India’s headline inflation continues to remain under control, despite concerns around rising fuel prices. He said any increase in inflation due to higher energy costs is likely to be temporary.
Given the current situation, Minda suggested the RBI maintain status quo on the repo rate in its June review. According to him, a rate hike at this stage could hurt business confidence and slow demand in the economy.
He also welcomed the RBI’s recent decision to conduct a $5 billion USD/INR buy-sell swap auction on 26 May to inject long-term liquidity into the banking system and support foreign exchange reserves.
Alongside a stable interest rate policy, ASSOCHAM has recommended additional support for MSMEs facing pressure from global disruptions and higher energy costs.
The industry body proposed a Rs 1 lakh crore On-Tap LTRO scheme at the repo rate to help banks and NBFCs lend to export-oriented and energy-linked MSMEs. It also suggested a 2% interest subsidy on working capital loans of up to Rs 5 crore for firms dependent on exports to the MENA and EU regions.
Further, ASSOCHAM said the RBI could consider a six-month loan moratorium or interest support for energy-intensive MSMEs to help them manage rising costs and maintain business stability.