Retail inflation in India eases to 67-month low of 3.34% in March

Sharp correction in food prices brought retail inflation based on Consumer Price Index (CPI) down to 3.34 per cent in March as against 3.6 per cent of February, the government reported on Tuesday. It is the lowest year-on-year inflation after August 2019. “The significant decline in headline inflation and food inflation during March is mainly attributed to decline in inflation of vegetables, eggs, pulses & products, meat & fish, cereals & products and milk & products,” a statement by the Statistic Ministry said...“The food inflation in March 2025 is the lowest after November 2021,” the Ministry said. Among the food items, vegetables saw a deflation of over 7 per cent while pulses were over 2.7 per cent. Meanwhile, edible oils and fruits saw a rise in prices as inflation for both items rose to over 17 per cent and 16 per cent, respectively. Core inflation (headline inflation minus food and fuel inflation) was over 4 per cent.

Rajani Sinha, Chief Economist with CareEdge, said: “Core inflation also remained benign at 4.1 per cent despite a marginal uptick. Interestingly, the fuel and light category exited deflation after staying in the deflationary zone for 18 consecutive months. However, this trend in fuel and light is unlikely to be sustained as Discoms of some major States have slashed electricity prices,” she said...Echoing the sentiment, Radhika Rao, Senior Economist at DBS Bank, said that despite a firmer core, January–March headline inflation not only undershot the RBI’s quarterly projection by a wide margin but also fell below the RBI’s target range. “This validates the central bank’s decision to shift to an accommodative stance, along with a rate cut at the April meeting. We maintain our call for further easing in June,” she said.

Producers’ inflation based on Wholesale Price Index (WPI) dropped to around 2 per cent in March as against 2.38 per cent of February. However, it is much higher than 0.26 per cent of March 2024.

“Positive rate of inflation in March is primarily due to increase in prices of manufacture of food products, other manufacturing, food articles, electricity and manufacture of textiles etc,” a statement by Commerce & Industry Ministry said.