New Delhi, May 13 (PTI) Retail inflation eased to a nearly six-year low of 3.16 per cent in April mainly due to subdued prices of vegetables, fruits, pulses, and other protein-rich items, creating enough room for the Reserve Bank to go for another round of rate cut in the June monetary policy review.
The Consumer Price Index (CPI) based inflation was 3.34 per cent in March and 4.83 per cent in April 2024. It was 3.15 per cent in July 2019.
NSO data showed a sharp decline of 91 basis points in food inflation in April 2025 in comparison to March 2025. The food inflation in April 2025 is the lowest since October 2021.
Food inflation in April was 1.78 per cent, lower than 2.69 per cent in the preceding month and 8.7 per cent in the year-ago month, showed data released by the National Statistics Office (NSO) on Tuesday.
The Reserve Bank, which has been mandated to ensure inflation remains at 4 per cent with a margin of 2 per cent on either side, has slashed the key interest rate by 50 basis points in two tranches (February and April) as the price situation improved.
The central bank has projected the CPI inflation for the financial year 2025-26 at 4 per cent, with Q1 at 3.6 per cent; Q2 at 3.9 per cent; Q3 at 3.8 per cent; and Q4 at 4.4 per cent.
“The significant decline in headline inflation and food inflation during the month of April 2025 is mainly attributed to decline in inflation of vegetables, pulses and products, fruits, meat and fish, personal care and effects and cereals and products,” NSO said.
There was a deflation in potato (12.7 per cent), tomato (33.21 per cent), chicken (6.78 per cent) arhar (14.27 per cent), and jeera (20.79 per cent) during April on annual basis.
During April, inflation in mustard oil was at 19.6 per cent, refined oil (sunflower, soyabean) at 23.75 per cent, apple at 17 per cent, and onion at 2.94 per cent.
The rural inflation was at 2.92 per cent in April 2025 compared to 3.25 per cent in the preceding month 2025.
Urban inflation declined marginally from 3.43 per cent in March 2025 to 3.36 per cent in April.
According to the data, the highest inflation was in Kerala at 5.94 per cent while the lowest was in Telangana at 1.26 per cent.
Commenting on inflation data, Aditi Nayar, Chief Economist, ICRA Limited, said that average inflation is at 3.5 per cent in FY2026, with the prints for Q2 and Q3 sharply trailing the RBI’s Monetary Policy Committee (MPC) projections for these quarters, allowing for an additional 75 bps of rate cuts in this calendar year.
“A 25 bps rate cut appears forthcoming in the June 2025 policy, followed by easing of 25 bps each in the August and October 2025 policy reviews.
“If the GDP growth print for Q4 FY2025 does not report an acceleration from the 6.2% seen for Q3 FY2025, the MPC may consider frontloading the rate easing, with a 50 bps cut in the upcoming review,” Nayar said.
Year-on-year fuel and light inflation rate for April was 2.92 per cent as against 1.42 per cent in March.
Inflation in ‘Transport and Communication’ segment was higher at 3.73 per cent in April compared to 3.36 per cent in March.
Paras Jasrai, Associate Director at India Ratings and Research said the latest data points to a low inflation intensity as this was the third successive month where inflation has been lower than the target of 4 per cent.
“We expect the RBI to opt in for a 25 bp cut in policy rates in view of the fragile global economic and geopolitical environment in the June 2025 monetary policy review. The cumulative rate cut in FY26 would depend on the pace of decline in inflation and evolving inflation-growth dynamics,” Jasrai said.
The price data are collected from selected 1,114 urban markets and 1,181 villages covering all states/UTs by field staff of NSO, Ministry of Statistics and Programme Implementation (MoSPI).
