India’s retail inflation decreased by 3.34% in March, reaching its lowest level in about six years, inspired by the fall in prices of vegetables and protein -rich foods. Consumer Price Index (CPI)-Based inflation was 3.61% in February and more than 4.85% in March last year.
The latest figures mark the lowest retail inflation rate since August 2019, when it was 3.28%.
Food inflation, a major component of CPI declined by 3.75% in February to 2.69% in March. In comparison, food inflation was 8.52% in March 2024.
In March 2025, the top five items recorded at the highest year-by-year inflation at the all-India level were according to the top five items coconut oil (56.81%), coconut (42.05%), gold (34.09%), silver (31.57%), and grapes (25.55%), statistics and program work. On the other hand, in March 2025, the lowest year-by-year inflation items were ginger (-38.11%), tomato (-34.96%), cauliflower (-25.99%), cumin (-25.86%), and garlic (-25.22%).
According to the Ministry of Statistics and Program Implementation (MOSPI), there was a significant decline in both headline and food inflation in rural areas during March 2025. Provisional data suggests that the rural headline inflation fell to 3.25% in March, below 3.79% in February.
Food inflation based on the Consumer Food Price Index (CFPI) in rural areas also saw a sharp decrease, falling from 4.06% to 2.82% in March in the previous month.
In contrast, urban areas saw a marginal growth in headline inflation in March 2025 (provisional) compared to 3.32% in February. Despite this, food inflation in urban areas declined significantly, decreasing by 3.15% in February to 2.48% in March, showing MOSPI data.
The decline in inflation has come immediately after the Reserve Bank of India (RBI) cuts 25 basis points at the rate of repo rate cut, which cite soft value pressure.
For the ongoing financial year 2025-26, RBI has estimated average CPI inflation at 4%. The quarterly breakdown is 3.6% for Q1, 3.9% for Q2, 3.8% for Q3 and 4.4% for Q4, with the risk equally balanced.
According to government data released on Tuesday, in parallel, wholesale price inflation also saw a decline, declining by 2.05% at a six -month low in March. Moderation was largely attributed to the reduction in prices of vegetables, potatoes and other essential foods.
Wholesale Price Index (WPI)-Based inflation recorded 2.38% in February and only 0.26% in March 2024.
