Retail Inflation Drops To Near 6-Year Low Of 3.16% In April
The April inflation marked the third consecutive month that remained below the Reserve Bank of India’s 4 per cent medium-term target
New Delhi: Staying within the comfort zone of the central bank, India’s headline retail inflation cooled in April to a nearly 6-year low of 3.16 per cent— the lowest since July 2019, especially due to the prices of vegetables, fruits, pulses, and other protein-rich items. However, the consumer price index or CPI based inflation was 3.34 per cent in March and 4.83 per cent in April 2024, while it was 3.15 per cent in July 2019, the government data said on Tuesday.
As per the data released by ministry of statistics & programme implementation, food inflation, which accounts for nearly half of the CPI basket, slowed to 1.78 per cent in April, compared to 2.69 per cent in March. “A sharp decline of 91-basis point is observed in food inflation in April, 2025 in comparison to March, 2025. The food inflation in April 2025 is the lowest after October, 2021,” the ministry data showed.
The April inflation marked the third consecutive month that remained below the Reserve Bank of India’s 4 per cent medium-term target. “The significant decline in headline inflation and food inflation during April 2025 is mainly attributed to decline in inflation of vegetables, pulses & products, fruits, meat and fish, personal care and effects and cereals and products,” the ministry said in a statement.
As per the data, there was a significant decline in headline and food inflation in the rural sector observed in April, easing to 2.92 per cent in April from 3.25 per cent in March, while urban inflation contracted to 3.36 per cent compared to 3.43 per cent a month earlier. “Year-on-yea housing inflation rate for the month of April, 2025 is 3 percent as compared to 3.03 per cent for the month of March, 2025. The housing index is compiled for the urban sector only,” the data showed.
“However, year-on-year fuel & light inflation rate for the month of April, 2025 was 2.92 per cent from 1.42 per cent at the same period a year ago. It is a combined inflation rate for both the rural and urban sector. Besides, the transport and communication inflation rate for the month of April was 3.73 per cent from 3.36 per cent at the same time last year,” it said.
Economists and analysts said that with the vegetable index dipping further, and compressing the food inflation, the April CPI inflation eased further to a 69 month low 3.16 per cent. “While the recent rise in temperatures in North India and unseasonal rainfall in parts of peninsular India may cause a spike in vegetable prices in the second half of May, we project it to print around 3.5 per cent in the ongoing month,” said Aditi Nayar, chief economist & head-research & outreach at ICRA Limited.
However, Rajani Sinha, chief economist, CareEdge Ratings said that the moderation of the April inflation was largely due to sustained fall in food inflation. “Encouraging prospects for agricultural production, the arrival of fresh rabi harvest and comfortable reservoir levels are positives for food inflation. IMD’s projection of an above-normal monsoon should support robust growth in agricultural output. However, monitoring the monsoon’s distributional aspect will be crucial,” Sinha added.
