India’s Retail Inflation Eases To Near Six-Year Low In April 2025; Check Here

key factor behind the moderation was a decline in food prices, which make up nearly 50 per cent of the CPI basket

Despite challenging weather conditions, including severe heatwaves, a strong agricultural output helped curb food inflation.

Source : PTI

India’s retail inflation fell to its lowest level since July 2019, with Consumer Price Index (CPI)-based inflation for April 2025 coming in at 3.16 per cent year-on-year, according to data released by the Ministry of Statistics and Programme Implementation on Tuesday.

This marks a 0.18 percentage point drop from March’s inflation rate of 3.34 per cent, indicating a continued softening in consumer prices. The latest reading also represents the third consecutive month that inflation has remained below the Reserve Bank of India’s medium-term target of 4 per cent. A key factor behind the moderation was a decline in food prices, which make up nearly 50 per cent of the CPI basket. 

Food Prices Hit Lowest Level Since October 2021

Food inflation in India dropped sharply in April 2025, reaching its lowest level since October 2021. The Consumer Food Price Index (CFPI), which measures changes in food prices, fell to 1.78 per cent in April, down from 2.69 per cent in March. The decline is largely due to reduced prices in essential categories such as vegetables, pulses, fruits, meat and fish, cereals, and personal care items.

Retail Inflation: Rural And Urban Trends

Retail inflation also eased across both rural and urban areas in April. In rural India, the inflation rate declined to 2.92 per cent, down from 3.25 per cent in March. Urban inflation dipped slightly to 3.36 per cent, compared to 3.43 per cent the previous month. Meanwhile, the overall Consumer Price Index (CPI) edged up marginally to 192.6 in April, from 192.0 in March.

Akhil Mittal, Senior Fund Manager-Fixed Income, Tata Asset Management, noted, "Headline CPI came in at 3.16 per cent YoY for the month of April 2025. This is largely in line with market expectations of around 3.2 per cent. Food inflation has remained low on back of low vegetable prices, low cereal prices. All other sub-categories of inflation also remain well below 4 per cent. Going by the current trend, it is likely that inflation for Q1FY26 comes below RBI trajectory. With global economic activity remaining tepid, we expect broader commodity prices to be anchored as well. We expect CPI to be well within RBI expected trajectory and hence provide space to RBI to support growth."