Retail inflation, as measured by the Consumer Price Index (CPI), breached the Reserve Bank of India’s (RBI) 4% target in June for the first time in 17 months , spurred on by the war in West Asia. Increasing for the eighth consecutive month, CPI inflation came in at 4.4% in June, higher than a Bloomberg economist poll prediction of 4.2% and the highest since December 2024, when the number was 5.2%.Food inflation, which carries the largest weight in the consumer basket at about 37%, rose to 5.32% in June. (Reuters)CPI inflation breached the 4% mark as the impact of the West Asia crisis on fuel prices got incorporated in CPI data and food services (restaurant, cooked meals etc.) inflation, already registering the impact of the war, inched up further. To be sure, overall inflation is still within RBI’s tolerance band of 2%-6%.Also Read: India's inflation rate rises to 3.21% in February before Iran war impact showsCore inflation, which excludes the food and fuel groups and is considered relatively more immune to seasonal fluctuations, came in at 4.1% in June, up from 3.7% in May. Non-core inflation, which includes food and fuel groups, came in at 4.9%, up from 4.3% in May. Inflation in the food and beverages division, which has a 37% weight in the CPI basket, came in at 5.3%, up from 4.8% in May.While the uptick in food inflation had a role to play in the increase in overall inflation, this must be read with the fact that this is partly due to an adverse base effect. While disaggregated data of the current series of CPI (with 2024 as the base year) is available only from January 2026, the old series (with 2012 as the base year) recorded a contraction in food and beverages prices from June to December in 2025.The June CPI numbers are the first to record the complete extent of the hike in retail prices of petrol and diesel. This is because the National Statistics Office (NSO) records petrol, diesel, and CNG prices as on the 15th of the month for computing CPI; and most of the retail price hike in these fuels were implemented after May 15. Petrol price across four metros (Delhi, Mumbai, Chennai, and Kolkata) as on June 15 was 6.9%-7.8% higher than the year before according to the petroleum ministry. Petrol inflation came in at 7.5% in the CPI data, up from 3.1% in May.Similarly, diesel price across the same four cities was 7.7%-8.7% higher than the year before on June 15. Diesel inflation came in at 8.4% in the CPI data, up from 3.4% in May. Similarly, CNG inflation came in at 6.2% in June, up from 1.9% in May.To be sure, petrol, diesel, and CNG inflation only covers the personal transport part of transport inflation, their respective weights of 2.5%, 0.1%, and almost zero, hardly big enough to drastically move CPI inflation.Another group that is showing the impact of the West Asia crisis is the food and beverage serving services. Inflation in this group – it has a 3.3% weight in CPI – has increased from 2.7% and 2.9% in February and March to 4.2%, 5.8%, and 6.9% in April, May, and June. This could be because food businesses are passing on the LPG price hike to consumers.