India is better positioned than most of the world's top 10 economies in managing retail inflation, according to an analysis released by the Associated Chambers of Commerce and Industry of India (Assocham) on 22 May 2026. The industry body has urged the Reserve Bank of India (RBI) to hold the repo rate steady at its upcoming monetary policy review while rolling out targeted liquidity, interest subvention, and moratorium support for stressed sectors.

India's Inflation Performance vs Global Peers

India's retail inflation stood at 3.2% in February 2026 and edged up to 3.5% in April 2026 — a rise of 0.3 percentage points. By contrast, the United States saw inflation climb from 2.4% in February to 3.8% in April, a jump of 1.4 percentage points. France, Italy, and Germany each recorded inflation increases of more than 1 percentage point over the same period. India also outperformed Brazil on this metric, according to the Assocham analysis.

What Assocham Is Recommending for the RBI

Nirmal K Minda, President of Assocham, called on the RBI to maintain a status quo on the repo rate at its forthcoming policy review in the first week of June 2026. 'As India's headline inflation still prevails in the benign conditions, we suggest RBI to maintain a status quo on repo rate in the forthcoming review of RBI monetary policy in the 1st week of June 2026,' Minda said. He added that while some further uptick in inflation cannot be ruled out given recent energy price movements, 'it will be a transitory phase in the inflation trajectory, and we are hopeful that inflation will return to benign territory.'

The chamber also welcomed the RBI's decision to conduct a $5 billion USD/INR buy-sell swap auction on 26 May 2026, aimed at injecting long-term liquidity into the banking system and bolstering forex reserves. Minda noted that the move 'will help manage liquidity conditions and stabilise rupee volatility amid global pressures and recent currency depreciation driven by geopolitical tensions and oil price shocks.'

Proposed Liquidity and Credit Support Measures

Assocham has put forward an 'On-Tap LTRO' scheme that would provide ₹1 lakh crore in liquidity support at the repo rate to banks and non-banking financial companies (NBFCs). The facility is intended to fund lending to export-oriented and energy-related micro, small and medium enterprises (MSMEs), primarily through working capital loans of up to ₹10 crore.

The industry body also proposed a 2% interest subsidy on working capital loans of up to ₹5 crore for MSMEs reliant on exports to the MENA and EU regions, to reduce borrowing costs amid tightening global trade conditions.

Moratorium Relief for Energy-Intensive MSMEs

Additionally, Assocham has asked the RBI to consider a six-month loan moratorium or equivalent interest support for energy-intensive MSMEs. The chamber argues this would help businesses absorb rising input costs and preserve financial stability during a period of elevated global energy prices. This comes amid broader concerns that oil price shocks and geopolitical disruptions could squeeze margins for small manufacturers and exporters in the months ahead.

With the RBI's June policy meeting approaching, the central bank's response to these recommendations — and its own inflation outlook — will be closely watched by markets and industry alike.