So India just released its latest CPI data and there's something worth paying attention to here. March inflation came in at 3.40% year-on-year, up from 3.21% the month before. That might not sound dramatic, but it's the first real monthly reading since the Middle East tensions escalated, and you can already see energy costs starting to bite.

What caught my eye is that food prices jumped 3.87% in the same period. Here's why that matters - food makes up roughly 37% of India's consumer price basket, so when food inflation moves, the overall CPI follows. And the situation could get worse. Farmers are already dealing with higher input costs from elevated oil prices, and now there's talk of below-normal monsoon rainfall this year. That's a double squeeze.

India's energy dependency is actually pretty extreme when you think about it. Around 90% of crude oil imports and over half of LPG come from the Middle East. So when Trump announced he'd block the Strait of Hormuz over the weekend, oil prices immediately jumped back above $100 a barrel. The supply chain disruption risk is real.

Here's the interesting part though - the government and businesses have been absorbing a lot of these costs so far, keeping retail fuel prices stable. But HDFC Bank's economist Sakshi Gupta made a solid point: if this continues and energy stays elevated, producers will eventually have to pass those costs to consumers. Right now the transmission to retail inflation is still limited, but that could change fast.

The Reserve Bank kept rates steady last week and is clearly in wait-and-see mode. According to analysts, the central bank still has policy room before needing to tighten, but it all hinges on whether Middle East supply chains normalize. If they don't, inflation expectations will keep climbing and the RBI might face pressure to act sooner than expected. The CPI trajectory over the next few months will be crucial to watch.