India's retail inflation dips to over 6-year low of 2.82% in May: Govt data

Cereal prices rose by 4.77% in May 2025, a slight moderation from April's 5.35% rise. Prices of pulses dropped 8.22%, following a 5.23% decline in April

India’s retail inflation dropped to 2.82 per cent in May, down from 3.16 per cent in April, mainly due to a slower increase in food prices, according to government data released on Thursday.

 

Food inflation in rural areas stood at 0.95 per cent and at 0.96 per cent in urban centres. The overall decline was driven by negative year-on-year inflation in vegetables (-13.7 per cent), pulses (-8.22 per cent), and spices (-2.82 per cent). Key staple categories like cereals and sugar witnessed moderate increases, with inflation of 4.77 per cent, and 4.09 per cent, respectively, while milk and oil products saw inflation of 3.15, and 17.91 per cent, respectively.  Notably, prices of onions, tomatoes and potatoes registered strong deflation, which weighed heavily on the overall food basket. Meanwhile, prices of pulses dropped 8.22 per cent, following a 5.23 per cent decline in the previous month.

 

May retail inflation: Rural and urban

In rural India, headline and food inflation saw a notable drop in May 2025. Provisional data shows rural headline inflation stood at 2.59 per cent in May, down from 2.92 per cent in April. Food inflation, based on the Consumer Food Price Index (CFPI), also declined to 0.95 per cent in May from 1.85 per cent in the previous month.

 

Urban areas also experienced a decline in inflation. Headline inflation in the urban sector fell to a provisional 3.07 per cent in May 2025, compared to 3.36 per cent in April. Food inflation in cities dropped significantly to 0.96 per cent in May from 1.64 per cent a month earlier.  Housing: The year-on-year inflation rate for the housing segment stood at 3.16 per cent in May 2025 (provisional), slightly higher than 3.06 per cent recorded in April.

 

Education: Inflation in the education sector remained largely stable, with a marginal dip to 4.12 per cent in May 2025, compared to 4.13 per cent in April.

 

Health: Health-related inflation rose to 4.34 per cent in May 2025 (provisional), up from 4.25 per cent in the previous month.

 

Transport and communication: The inflation rate for transport and communication increased to 3.85 per cent in May 2025, compared to 3.67 per cent in April.

 

Fuel and light: Inflation in the fuel and light category eased to 2.78 per cent in May 2025, down from 2.92 per cent in April.