Author: Nishtha Mehrotra | EQMint

India is heading into the festive season with pressure building on both borrowing costs and household prices. The Reserve Bank of India’s October policy meeting comes as economists increasingly expect a 25-basis-point repo rate hike to 5.50%, which would be the first increase since 2023. A Reuters poll found a majority of economists expecting the move amid inflationary pressures.

At the same time, appliance makers are preparing price increases of up to 5–8% from 1 October, citing higher metal, crude derivative and freight costs.

Food prices face another potential pressure point. Maharashtra has declared 265 of its 358 talukas, or 74% of the state, drought-affected after rainfall deficits, with relief measures including crop-loan restructuring and land-revenue concessions.

The combination creates a difficult festive-season backdrop. Higher interest rates could raise borrowing costs, while weather-related supply disruptions may add pressure to food prices. The extent of the impact will depend on inflation trends, crop-loss assessments and the RBI’s October decision.

Disclaimer: This article is for information purposes only and is not investment advice.

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