India is likely to maintain the current 4% inflation target for the Reserve Bank of India (RBI), officials familiar with the matter said, as the framework has proven effective in managing price stability. The target, which serves as the mid-point of a 2%-6% range, is set by the government every five years and is up for review in March.

Finance ministry officials, speaking on condition of anonymity, indicated that no major changes are expected. The government has also sought feedback from the RBI, which reportedly favors keeping the existing target following internal deliberations and consultations with stakeholders.

The inflation targeting framework, in place since 2016, has helped India navigate price volatility, even during periods of geopolitical tension and supply shocks. Analysts say the approach has anchored expectations, allowing monetary policy decisions to remain predictable and effective.

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India’s consumer price inflation rose in November from a record low in October, but still stayed below the central bank’s 4% target. Maintaining the target is seen as crucial for guiding interest rate decisions and ensuring that medium-term price pressures remain contained.

Experts note that the RBI’s focus on the 4% mid-point supports financial stability, fosters investor confidence, and helps households plan spending and savings. Any deviation from the target could impact both borrowing costs and the broader economy.

With the formal review scheduled in March, officials expect the announcement to confirm the continuation of the existing target. The government and RBI are expected to jointly reaffirm the inflation framework as a key tool in India’s macroeconomic policy.

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