The RBI deputy governor Urjit Patel-led committee has set CPI target at 8 per cent by January 2015.
"If the rains are normal, CPI inflation will likely stay below the RBI's 8 per cent-in-a-year-ahead target. In case of an El Nino, this will be very difficult to achieve, as a 5 per cent swing in food prices impacts CPI inflation 250 basis points," BofAML said in a report here.
The report said the Australian weather bureau sees increasing chance of El Nino in coming months. The US Climate Prediction Centre also sees about a 50 per cent chance of El Nino developing during the summer or fall.
International climate models surveyed by the Australian weather bureau indicate that warming of the tropical Pacific is likely in the coming months, with most models showing temperatures approaching or exceeding El Nino thresholds during the austral winter, the report said.
CPI inflation eased to 8.1 per cent in February from 8.8 per cent in January and 9.9 per cent in December
The report expects that RBI may not raise policy rates on April 1 review.