Easing food deflation contrasts with trade risks and policy adjustments

India’s food deflation eased to 3.91 percent in November, while rural inflation turned marginally positive at 0.10 percent, offering relief to consumption trends. Core inflation, however, remained elevated due to sharp gains in gold and silver prices. On the supply side, the government expanded coal linkages without end use restrictions to reduce import dependence. Meanwhile, proposed US tariffs on Indian exports, challenged by US lawmakers, could potentially reduce exports by 43 percent, impacting up to 86.5 billion dollars annually and trimming up to 0.5 percent from FY26 GDP growth.