India’s retail inflation falls to 3.34 per cent in March, lowest level since August 2019

 

India’s annual retail inflation, measured by the Consumer Price Index (CPI), eased to 3.34% in March 2025—the lowest level since August 2019—according to data released by the Ministry of Statistics on Tuesday.

Food inflation also slowed significantly during the month, dropping to 2.69%, its lowest since November 2021.

The notable decline in both headline and food inflation is primarily attributed to a reduction in the prices of key food items such as vegetables, eggs, pulses, meat and fish, cereals, and milk, the ministry noted.

Among the commodities with the sharpest year-on-year price drops in March were ginger (-38.11%), tomato (-34.96%), cauliflower (-25.99%), jeera (cumin) (-25.86%), and garlic (-25.22%).

Housing inflation stood at 3.03% in March, slightly higher than February’s 2.91%. Notably, the housing index is compiled only for the urban sector.

Fuel and light inflation was recorded at 1.48%, while education inflation for the month came in at 3.98%, the data showed.

Retail inflation in India has been on a downward trend in recent months. Reflecting this, the Reserve Bank of India’s (RBI) Monetary Policy Committee recently revised its inflation forecast for 2025–26 to 4.0%, down from the earlier projection of 4.2%, citing improved prospects for food prices.

“Headline inflation moderated during January–February 2025 following a sharp correction in food inflation. The outlook for food inflation has turned decisively positive,” said RBI Governor Sanjay Malhotra last week.

He noted that concerns regarding rabi crop output have eased significantly, with the second advance estimates pointing to record wheat production and higher pulse output compared to the previous year. These developments, along with robust kharif crop arrivals, are expected to contribute to a sustained softening of food prices.

“The sharp decline in inflation expectations in our latest survey—both for three months and one year ahead—will help anchor inflationary trends going forward,” Malhotra added.

The Governor also emphasized that falling global crude oil prices are favorable for the inflation outlook. However, he cautioned that global market uncertainties and potential weather-related supply disruptions remain as upside risks.

Assuming a normal monsoon, the RBI projects CPI inflation for the financial year 2025–26 at 4.0%, with quarterly estimates as follows: Q1: 3.6%, Q2: 3.9%, Q3: 3.8%, and Q4: 4.4%.

The risks to this outlook are considered evenly balanced.