Large swathes of Indian farmland have been affected by floods and torrential downpours, with the key agricultural state of Punjab facing its worst floods in 40 years.

While crops have been damaged, analysts forecast that the overall impact on inflation for fiscal year 2026 is not going to be severe enough to push it past the central bank's midpoint target of 4% — Reserve bank of India's consumer inflation target range is 2% to 6%

Limited impact on cereal production and sufficient stocks are expected to keep food inflation in check over the near future, HSBC said in a report on Monday, adding that it was "not too worried about underlying inflation momentum."

Breaking its nine-month downward trend, consumer inflation in August inched to 2.1%, from 1.5% in July due to a rise in food prices

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