 Governor Sanjay Malhotra said){kind=link}
India is unlikely to revise its official inflation target upward anytime soon, Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Wednesday, while indicating that the country could eventually consider lowering its inflation benchmark over the longer term.
Speaking at the Financial Congress of the Bank of Russia, Malhotra said India’s inflation-targeting framework has played a crucial role in bringing down average inflation and strengthening the country’s macroeconomic stability.
No Plans To Raise Inflation Target
India adopted a flexible inflation-targeting framework in 2016, under which the RBI is mandated to maintain headline retail inflation at a target fixed by the central government.
In March 2026, the government retained the inflation target at 4%, with a tolerance band of 2% to 6%, for another five years.
Malhotra made it clear that there is no proposal to increase the inflation target in the near future.
“There is no expectation of the target being raised in the foreseeable future,” the RBI Governor said.
Lower Inflation Target Possible In Long Term
While ruling out an increase, Malhotra suggested that India could eventually consider lowering its inflation target as the economy evolves.
He noted that several advanced economies operate with lower inflation objectives and said India may also have a case for gradually moving towards a lower benchmark over the long term.
The remarks indicate that although the current framework remains appropriate for India’s economic conditions, policymakers remain open to reviewing it as inflation dynamics and economic fundamentals change over time.
Inflation To Rise, But Stay Below RBI’s Target
The RBI Governor said inflation is expected to edge up from current levels in the coming months but is likely to remain below the central bank’s medium-term target of 4%.
He also expressed confidence in India’s economic outlook, saying the country is well-positioned to sustain robust growth over the coming years despite global economic uncertainties.
Retail Inflation Remains Below Target
India’s retail inflation eased to 3.93% in May, staying below the RBI’s 4% target and providing room for policymakers to focus on supporting growth while maintaining price stability.
The country’s economy also continued to show strong momentum, with GDP expanding 7.8% year-on-year during the January-March quarter, underscoring the resilience of domestic demand.
Balancing Growth And Price Stability
Malhotra’s remarks come at a time when central banks worldwide are navigating persistent global uncertainties, evolving inflation trends and slowing growth in several major economies.
For India, the focus remains on maintaining a balance between sustaining economic expansion and ensuring inflation remains under control.
The RBI has repeatedly maintained that keeping inflation anchored around the 4% target is essential for preserving macroeconomic stability while creating a favourable environment for long-term growth.