Retail inflation in India eased to a near six-year low of 3.16% in April 2025, driven by falling prices of vegetables, fruits, pulses, and protein-rich items, according to data from the National Statistics Office (NSO). This marks a decline from 3.34% in March 2025 and 4.83% in April 2024, with food inflation dipping to 1.78%, its lowest since October 2021.
The Consumer Price Index (CPI) figure is the lowest since July 2019 (3.15%), and the data suggests greater policy room for the Reserve Bank of India (RBI) to further reduce interest rates in its upcoming June monetary policy review.
Food inflation saw a significant fall of 91 basis points month-on-month, aided by annual deflation in key items such as tomatoes (-33.21%), potatoes (-12.7%), arhar (-14.27%), chicken (-6.78%), and jeera (-20.79%). Meanwhile, notable inflation was observed in mustard oil (19.6%), refined oils (23.75%), and apples (17%).
Urban inflation slightly declined to 3.36% (from 3.43% in March), while rural inflation stood at 2.92%, down from 3.25%. Among states, Kerala recorded the highest inflation at 5.94%, while Telangana reported the lowest at 1.26%.
The RBI has projected FY26 CPI inflation at 4%, with quarterly expectations ranging between 3.6% and 4.4%. Given the latest figures, analysts anticipate a 25 basis points rate cut in June, with further easing likely in August and October.
ICRA Chief Economist Aditi Nayar noted that inflation prints for Q2 and Q3 are tracking below RBI’s projections, leaving room for up to 75 bps of rate cuts this year. India Ratings’ Paras Jasrai echoed the sentiment, expecting the RBI to act cautiously in light of a fragile global economic backdrop.
The inflation data was compiled from over 2,295 markets across urban and rural India by MoSPI field staff.
