New Delhi, April 15: India’s retail inflation dropped to its lowest level in over five years in March, driven largely by a continued decline in food prices, according to official data released by the Ministry of Statistics & Programme Implementation.
Retail inflation, measured by the Consumer Price Index (CPI), eased to 3.34% in March from 3.61% in February. This marks a significant improvement and provides the Reserve Bank of India (RBI) with additional room to consider a rate cut—potentially up to 50 basis points or more—in the upcoming financial year (FY26) to support economic growth, analysts noted.
Food inflation, at 2.69% in March 2025, was the lowest after November 2021.
Core inflation, which excludes food and fuel prices, stood at 4.0% in March, slightly down from 4.1% in February. Meanwhile, rural CPI inflation declined to 3.25% in March from 3.29% the previous month, while urban CPI inflation ticked up slightly to 3.43% from 3.32%.
The most notable decline came in food inflation, which fell to 2.69% in March from 3.75% in February—a steep 106 basis point drop. This marks the lowest level for food inflation since November 2021 and reflects a broader trend of easing prices, particularly for vegetables.
Retail inflation had already fallen below the 4% mark in February 2025 for the first time in six months, largely due to declining vegetable prices, and the downward trend continued in March.
In its April 9 monetary policy statement, the Reserve Bank of India maintained a positive outlook on inflation, projecting CPI inflation for FY26 at 4.0%, assuming a normal monsoon. RBI Governor Sanjay Malhotra noted that food inflation trends have turned favorable, supported by seasonal declines in vegetable prices.
