India’s retail inflation declined marginally to 3.34% in March, reaching its lowest level in nearly six years, driven by falling prices of vegetables and protein-rich food items. Consumer Price Index (CPI)-based inflation was 3.61% in February and significantly higher at 4.85% in March last year.
The latest figures mark the lowest retail inflation rate since August 2019, when it stood at 3.28%.
Food inflation, a key component of the CPI, also eased to 2.69% in March from 3.75% in February. In comparison, food inflation was 8.52% in March 2024.
The top five items recording the highest year-on-year inflation at the All-India level in March 2025 were coconut oil (56.81%), coconut (42.05%), gold (34.09%), silver (31.57%), and grapes (25.55%), as per Ministry of Statistics & Programme Implementation release. On the other hand, the items with the lowest year-on-year inflation in March 2025 were ginger (-38.11%), tomato (-34.96%), cauliflower (-25.99%), jeera (-25.86%), and garlic (-25.22%).
According to the Ministry of Statistics and Programme Implementation (MOSPI), a notable decline in both headline and food inflation was observed in the rural sector during March 2025. Provisional data shows rural headline inflation fell to 3.25% in March, down from 3.79% in February.
Food inflation based on the Consumer Food Price Index (CFPI) in rural areas also saw a sharp decrease, dropping to 2.82% in March from 4.06% in the previous month.
In contrast, urban areas witnessed a marginal uptick in headline inflation, rising to 3.43% in March 2025 (provisional), compared to 3.32% in February. Despite this, food inflation in urban areas declined significantly, easing to 2.48% in March from 3.15% in February, MOSPI data showed.
The decline in inflation comes shortly after the Reserve Bank of India (RBI) cut the repo rate by 25 basis points, citing softening price pressures.
For the ongoing fiscal year 2025-26, the RBI has projected average CPI inflation at 4%. The quarterly breakdown stands at 3.6% for Q1, 3.9% for Q2, 3.8% for Q3, and 4.4% for Q4, with risks stated to be evenly balanced.
In parallel, wholesale price inflation also saw a decline, falling to a six-month low of 2.05% in March, according to government data released on Tuesday. The moderation was largely attributed to reduced prices of vegetables, potatoes, and other essential food items.
Wholesale Price Index (WPI)-based inflation was recorded at 2.38% in February and just 0.26% in March 2024.