India's Retail Inflation Cools to 3.16% — Lowest in Over 6 Years as Food Prices Tumble

India’s retail inflation fell to a five-year low of 3.16% in April 2025, driven by a sharp decline in food prices, offering welcome relief to both consumers and policymakers. This marks the lowest CPI inflation print since July 2019, according to provisional data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.

The April reading is down from 3.34% in March and well below the 4.83% recorded in April last year, highlighting a sustained disinflationary trend that could pave the way for further policy easing by the Reserve Bank of India (RBI).

Food Inflation Hits 2.5-Year Low
The biggest contributor to this decline was a steep drop in food inflation, which eased to 1.78% in April, down 91 basis points from March’s 2.69%. This is the lowest food inflation since October 2021. Prices of vegetables, cereals, pulses, fruits, and personal care items moderated significantly. However, some categories like milk, oils, and fruits continued to see upward pressure.

This steep drop of 91 basis points was led by a broad moderation in the prices of vegetables, cereals, pulses, fruits, and personal care items. However, certain essentials like milk, oils, and fruits continued to exert upward price pressure. Geographically, rural areas witnessed a sharper decline in inflation compared to urban centres. Rural CPI fell to 2.92% from 3.25%, while urban CPI dipped to 3.36% from 3.43%. Rural food inflation dropped to 1.85%, and urban food inflation eased to 1.64%.

Across other sectors, inflation showed mixed trends. Housing inflation remained stable at 3.00%, while education costs saw a slight uptick to 4.13%. Health inflation held steady at 4.25%. In contrast, fuel and light inflation nearly doubled to 2.92% from the previous month, and transport and communication inflation rose to 3.73%, indicating price pressures in essential services and mobility.

This marks the third straight month of CPI staying under 4%, with economists now expecting a rate cut in June. The RBI, which aims to keep inflation within a 2-6% band, had already reduced the repo rate by 25 basis points to 6% in April.
With GDP growth showing signs of slowing — Q4 FY24 growth was the weakest since early 2022 barring one quarter — the RBI may increasingly pivot toward supporting credit growth and economic activity.
 

Read This Also: Why Are BSE Sensex And Nifty 50 Falling Today After Monday’s Big Rally?