The Reserve Bank of India (RBI) has raised concerns about the risk of inflation becoming entrenched due to ongoing geopolitical tensions in the Middle East. Speaking at Princeton University, RBI Governor Sanjay Malhotra emphasized that prolonged conflicts could lead to initial price shocks, particularly in energy, spilling over into broader inflation across various sectors. He noted that the Middle East is crucial for India's economy, supplying about 50% of its crude oil and accounting for one-fifth of its imports. Currently, India has avoided sharp fuel price increases, as state-run refiners have absorbed some costs, but this situation may change with rising financial pressures. Malhotra indicated that the RBI's strategy would focus on managing inflation expectations rather than implementing aggressive rate hikes, maintaining a cautious approach as the situation evolves. The RBI has kept interest rates unchanged, signaling that it will closely monitor developments before making further decisions.