Higher food inflation could constrain spending on non-food items, India report says

Business Recorder reported that the Indian government expects higher food inflation to restrain spending on non-essential goods. In its monthly economic report released on Monday, the administration warned that rising food costs would take a larger slice of household disposable income, leaving less for discretionary purchases.

The report flagged uncertainty over food inflation and farm output, citing an intensifying El Nino that is forecast to reach its strongest point in late 2026. Inflation is being pushed by food costs, international commodity movements and weather risks, it noted.

Beyond food, the report described India's economic activity, inflation and external position as relatively steady amid global economic uncertainty. Domestic demand has remained resilient and supported growth, although expansion has moderated somewhat. The government is also tracking sovereign bond markets worldwide, and movements in Indian bond yields, whether upward or downward, were flagged as a risk.