Consumer price inflation in India, as represented by Consumer Price Index (CPI), gained to 3.65% in February from 3.17% in the previous month. In February 2016, CPI inflation was at 5.26%. As per market survey, CPI inflation was expected to come at 3.66%.

''With crude oil prices having moderated in the last week, fuels and fares are unlikely to exert substantial additional pressure on CPI inflation in the near term. The appreciation of the INR relative to the USD is likely to have a smaller impact on the CPI inflation relative to the WPI inflation, with a larger proportion of imports as well as commodities whose prices track global trends, in the latter, said ICRA.

''The expectation of a healthy rabi harvest would continue to dampen the prices of pulses in the ongoing month,'' it added. Nevertheless, ICRA expects the CPI inflation to rise to above 4.5% in March 2017, as the base effect continues to unwind and prices of perishables track a seasonal uptrend, while remaining below the RBI's forecast of 5.0%.

''Nevertheless, the likelihood of a repo rate cut by the RBI in April 2017 remains subdued, given its focus on bringing inflation to 4% in a durable manner,'' it said.