BENGALURU, April 9 (Reuters) - India's annual inflation likely rose modestly in March to 3.48%, according to a Reuters poll of economists, as a fall of around 11% in gold prices last month partly offset a surge in fuel prices in the wake of the Iran war. 

While food price rises were modest, the U.S.-Israeli war on Iran which began on February 28 prompted a jump in global oil prices and severe fuel shortages in India, the world's most populous country.

But retail price rises have been mostly stable as New Delhi cut taxes on petrol and diesel to protect consumers.

Inflation has stayed below the Reserve Bank of India's medium-term target of 4% for over a year. The central bank kept its key policy rate unchanged on Wednesday, as expected.

GOLD PRICE FALL EASES PRESSURE ON CORE INFLATION

The April 6-9 Reuters poll of 45 economists forecast inflation, measured by the annual change in the consumer price index, climbed to 3.48% in March from 3.21% in February.

"Food inflation is expected to remain benign owing to robust supply, while gold prices have come off (from their peaks), taking pressure off core inflation," said Aditya Vyas, chief economist at STCI Primary Dealer Limited.

"There will be some second-round pass-through effects from fuel shortage ... (but) most of the influences there on headline CPI appear to be steady so far."

HDFC Bank estimates that fuel inflation rose around 11% year-on-year compared with just 0.1% in February.

Even with Wednesday's announcement of a ceasefire between the U.S. and Iran, Brent crude futures are about one-third higher than where they were in February, which many economists say will start pushing inflation higher over coming months. 

RISKS TO INFLATION OUTLOOK

Meanwhile, spot gold prices fell more than 11% in March as traders scrambled to cover already-stretched margins in equity markets.

Rahul Bajoria, head of India and ASEAN economic research at BofA Securities, noted "pass-through of higher oil prices is expected to come with a lag".

Highlighting risks to India's growth and inflation outlook, the RBI now estimates price rises to average 4.6% this financial year.

Core inflation, which excludes volatile food and fuel components and better reflects underlying demand, is expected to have edged up slightly to 3.53% in March from February's estimate of 3.41%. India does not publish official core inflation data.

Wholesale-price-index-based inflation likely rose to an annual 3.04% last month from 2.13% in February, the survey showed.

(Reporting by Pranoy Krishna; Polling by Pulkit Khanna, Susobhan Sarkar and Renusri K; Editing by Hari Kishan, Ross Finley and Emelia Sithole-Matarise)

By Pranoy Krishna