April 16, 2025 | Business – India

India’s retail inflation drops to 3.34% in March 2025—the lowest since August 2019. Food inflation eases sharply to 2.69%, with rural India seeing the biggest relief.

India’s retail inflation continued its downward trend, easing to 3.34% in March 2025, the lowest level recorded since August 2019, according to the latest official data. This marks the second consecutive month that the Consumer Price Index (CPI) has stayed below the Reserve Bank of India’s (RBI) 4% medium-term target, offering relief to households and policymakers alike.

Key Highlights:

• March CPI inflation eased to 3.34%, down from 3.61% in February
• Food inflation dropped sharply to 2.69%, the lowest since November 2021
• Rural inflation cooled to 3.25%, while urban inflation rose slightly to 3.43%
• Significant fall in prices of vegetables, pulses, eggs, cereals, and milk products

Food Prices Lead the Decline

The sharp drop in overall inflation was primarily driven by a significant decline in food prices. The Consumer Food Price Index (CFPI) fell to 2.69% year-on-year in March, compared to 3.75% in February. This is the sharpest fall in food inflation since 2021, supported by lower prices of key food items including vegetables, eggs, pulses, fish, and dairy products.

Rural Areas See Greater Relief

Inflation in rural India saw a notable drop, with overall rural CPI falling to 3.25% from 3.79% in February. Rural food inflation declined even more sharply to 2.82%, compared to 4.06% the previous month—indicating broader relief for rural households.

Meanwhile, urban inflation edged up slightly to 3.43% from 3.32%, but urban food inflation continued to ease, coming down to 2.48% from 3.15% in February.

Sector-Wise Inflation Snapshot

• Housing Inflation: Rose to 3.03% in March, up from 2.91%, applicable only to urban areas.
• Fuel & Light: Returned to positive territory at 1.48%, after being -1.33% in February.
• Education: Increased slightly to 3.98% from 3.83%.
• Healthcare: Rose to 4.26% compared to 4.12% last month.
• Transport & Communication: Increased to 3.30% from 2.93%.

Sharp Price Hikes in Select Items

Despite the overall moderation, certain commodities witnessed steep price hikes:

• Coconut oil: +56.81% YoY
• Coconut: +42.05%
• Gold: +34.09%
• Silver: +31.57%
• Grapes: +25.55%

These sharp spikes reflect volatility in specific commodity markets despite broader price stability.

Outlook

The continued decline in retail inflation strengthens the case for policy stability from the RBI, as it remains comfortably within the central bank’s target range. However, the rise in costs of healthcare, education, and transport sectors suggests that core inflation pressures persist in some areas.

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