India's Retail Inflation Reaches a Nearly Six-Year Low

In March 2025, India's retail inflation slightly decreased to 3.34%, marking the lowest level in nearly six years. This decline was primarily driven by falling prices of vegetables and protein-rich food items.

Food Inflation Shows Significant Ease

Food inflation, a crucial component of the Consumer Price Index (CPI), also saw a reduction, dropping to 2.69% in March from 3.75% in February. Comparatively, food inflation was at 8.52% in March 2024.

Key Items Influencing Inflation Rates

The Ministry of Statistics & Programme Implementation highlighted that coconut oil, coconut, gold, silver, and grapes recorded the highest year-on-year inflation rates. Conversely, ginger, tomato, cauliflower, jeera, and garlic experienced the lowest inflation rates.

Rural vs. Urban Inflation Trends

A notable decline in both headline and food inflation was observed in rural areas, whereas urban areas witnessed a slight increase in headline inflation. However, food inflation in urban areas also declined significantly.

RBI's Response and Future Projections

Following the recent repo rate cut by the Reserve Bank of India (RBI), the central bank has projected an average CPI inflation of 4% for the fiscal year 2025-26, with risks evenly balanced.

Wholesale Price Inflation Also Declines

Parallel to retail inflation, wholesale price inflation fell to a six-month low of 2.05% in March, attributed to reduced prices of essential food items.