India's retail inflation eases to 3.16% in April; lowest since July 2019

CPI-based inflation has now stayed below the Reserve Bank of India's medium-term target of 4% for the third consecutive month

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

 

The April figure reflects a decline of 0.18 percentage points from March’s 3.34 per cent, marking a steady easing of prices.

 

CPI-based inflation has now stayed below the Reserve Bank of India's medium-term target of 4 per cent for the third consecutive month.

 

Robust harvest despite intense heatwaves drove down food costs, which account for nearly half of the consumer price basket.

 

 

Food prices lowest since October 2021

The Consumer Food Price Index (CFPI), which tracks inflation in food items, showed a sharp decrease to 1.78 per cent in April 2025, down from 2.69 per cent in March. This is the lowest food inflation rate recorded since October 2021.

 

The fall in food inflation is attributed to price declines in key categories such as vegetables, pulses, fruits, meat and fish, cereals, and personal care items.

 

April retail inflation: Rural vs urban

In rural India, headline inflation dropped to 2.92 per cent in April from 3.25 per cent in March. Urban areas also saw a dip, with inflation falling to 3.36 per cent from 3.43 per cent in the same period. The overall combined CPI index rose marginally to 192.6 in April from 192.0 in March.

 

Rural areas experienced a food inflation of 1.85 per cent, while urban areas saw a slightly lower figure of 1.64 per cent.

 

Housing: Urban housing inflation stood at 3.00 per cent, slightly down from 3.03 per cent in March.

 

Education: Inflation in education services rose to 4.13 per cent from 3.98 per cent.

 

Health: Health-related inflation remained nearly flat at 4.25 per cent, compared to 4.26 per cent in March.

 

Transport and communication: Inflation rose to 3.73 per cent, up from 3.36 per cent the previous month.

 

Fuel and light: Inflation rose to 2.92 per cent from 1.42 per cent.

 

April retail inflation: Kerala saw highest, Telangana lowest

Kerala recorded the highest combined year-on-year inflation rate at 5.94 per cent, followed by Karnataka (4.26 per cent), Jammu & Kashmir (4.25 per cent), Punjab (4.09 per cent), and Tamil Nadu (3.41 per cent). Telangana reported the lowest at 1.26 per cent.

 

India’s wholesale price index (WPI)-based inflation for April 2025 will be released on Wednesday, May 14.

 

RBI FY26 inflation forecast

At its bi-monthly policy meeting in April, the RBI projected CPI-based inflation for the current financial year (FY26) at 4 per cent, assuming a normal monsoon. Notably, inflation in the April–June quarter (Q1) is expected to dip as low as 3.6 per cent, revised sharply down from an earlier estimate of 4.5 per cent.

 

Retail inflation cooled to a seven-month low of 3.61 per cent in February 2025, slipping below the RBI’s medium-term target of 4 per cent for the first time since August 2024 and has steadily declined in the subsequent two months.

 

RBI's quarter-wise CPI inflation forecasts for FY26 are as follows:

 

FY26 Q1: 3.6 per cent

FY26 Q2: 3.9 per cent

FY26 Q3: 3.8 per cent

FY26 Q4: 4.4 per cent

 

A Reuters poll conducted in March also expects average inflation to hover around 4 per cent for the year.

 

RBI MPC repo rate cuts

The RBI’s Monetary Policy Committee (MPC) unanimously voted to cut the repo rate by 25 basis points to 6 per cent and shifted its policy stance to ‘accommodative', signalling room for further rate reductions.

 

The next meeting of the RBI’s MPC is scheduled for June 4–6.

 

CPI data for May 2025 will be released on June 12, 2025.