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The interconnectedness of global economy is presenting a situation where the images are changing faster than what a kaleidoscope can show with few twists and turns. It was hard to believe, till a couple of years back, that India will be facing a deflationary like situation. Inflation measured through the WPI has remained in the negative for seven months in a row; this is aft er both WPI and CPI on an average remained at a higher single digit or in lower tens for most part of 2012 and 2013. One of the important factors that led to higher inflation was higher commodity prices globally. And since India remains a net importer of commodities, including crude oil and precious metals forming almost 45 per cent of the total imports, this would indirectly seep into our economy and result in higher inflation.

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