New Delhi, April 23 -- The Reserve Bank of India's Monetary Policy Committee is willing to look through the current supply-driven inflation spike for now, but has flagged a possible policy tightening from the second half of FY27 if the Middle East conflict and El-Nino conditions prolong and push prices beyond food and fuel, according to an analysis of the latest MPC meeting minutes by ICICI Global Markets Research.

The minutes highlight a sharp shift in the growth-inflation balance following the Middle East conflict and the blockade of the Strait of Hormuz, a route that accounts for nearly half of India's energy imports. Members noted that the external account is also under pressure due to higher energy import costs, lower exports to GCC...