NEW DELHI: On a day government data showed the protracted Iran war was hurting the Indian economy, US President Donald Trump reinstated the naval blockade in the Strait of Hormuz and announced a 20% toll that transiting ships must pay for their “safety and security”.
Iranian ships will not be allowed, Trump said while claiming the US has taken over the strait as its “guardian”. “We are reinstating THE IRANIAN BLOCKADE, so named because it is only stopping Iran’s ships or customers from entering or leaving,” Trump wrote on his social media platform Truth Social, adding: “All other countries will have fair and open use of the Strait.”
The fresh developments could push up global oil prices and add to uncertainty in the equity markets.
On Monday, India’s retail inflation shot up to an 18-month high of 4.38% in June, breaching the Reserve Bank of India’s 4% target for the first time since January 2025, as the fallout of the Iran conflict, higher fuel prices and a sharp rise in food costs pushed up prices across the economy.
Government data showed the Consumer Price Index (CPI)-based inflation rose from 3.94% in May to 4.38% in June. The surge was driven by both food and non-food components, with transport and restaurant prices reflecting the pass-through of higher petrol, diesel, and commercial LPG prices.
Food inflation contributed 185 basis points (bps) to headline inflation, while non-food items accounted for 250 bps. Inflation in the food and beverages category crossed 5% for the first time under the new CPI series, amid a 40% rainfall deficit during June that raised concerns over crop output.
The impact of the petrol and diesel price hikes announced in May became evident in June with transport inflation rising sharply from 1.75% to 4.31%.
US steps up attacks on Iranian targets
The US and Iran continued to exchange strikes on Monday. US Central Command (Centcom) said it has hit a submarine and Iranian ship maintenance facility overnight, in response to Iran targeting commercial ships in the Strait of Hormuz
