The consumer food price inflation was at a three year low of 2.7% in March from 3.75% in the previous month, according to official data.
| Photo Credit: The Hindu
Retail inflation eased to a 5.5 year-low of 3.34% in March 2025, from 3.61% in the previous month, mostly attributable to lower food prices, according to data from the Ministry of Statistics and Programme Implementation.
The Consumer Price Inflation (CPI) was significantly lower than the Reuters estimate of 3.6%.
The slowing prices comes following two consecutive repo rate — the rate at which banks borrow from the RBI — cuts of 25 basis points (bps) each by the Reserve Bank of India.
“The softer than expected CPI inflation will provide further comfort to RBI to continue to prioritise growth. We retain our view that RBI will continue on its accommodative stance with the terminal repo rate likely around 5-5.25%,” according to Upasna Bharadwaj, Chief Economist, Kotak Mahindra Bank.
A favourable base of high inflation also supported easing of general price levels, experts said. Repo rate is the rate at which banks borrow from the RBI. A basis point is one-hundredth of a percentage.
Food inflation at a three year low
The consumer food price inflation (CFPI) was at a three year low of 2.7% in March from 3.75% in the previous month , according to data from the Centre for Monitoring Indian Economy (CMIE).
Among major crops, tomato prices declined at a pace of 34.96% in the reporting month, steeper than the 28.57% deflation in February 2025.
Potato prices increased at a pace of 2.3%, which was the lowest in a little more than a year. The kitchen staple’s price had increased at a pace of 26.14% in the previous month. Onion prices increased 19.35% in the reporting month from 30.23% in the previous month. Overall, vegetable prices deflated 7% for the second consecutive month. Pulses and products prices deflated 2.73%, in the reporting month. Rice and wheat prices increased at 4.9% and 9% in March 2025. These were 5.29% and 9.17% in the previous month.
Fuel and Light inflation increased moderately to 1.48%. This is the first time the category is inflating as it was facing a deflation since September 2023.
Rural inflation came in at a lower 3.25% in the reporting month, down from 3.79% in February 2025.
Kerala had the highest inflation of 6.6% followed by Chhattisgarh, Maharashtra, Tamil Nadu, Karnataka, Assam and Haryana which all had inflation of above 3.3%. Inflation was lowest in Delhi and Telangana coming in at 1.5% and 1.1% respectively.
The CPI data moved in the same direction as the WPI data, which was released on the same day by the Ministry of Commerce and Industry. Wholesale prices eased 2.05% in the reporting month, from 2.38% in February 2025. Primary articles prices increased at a modest 0.76% in March 2025, down from 2.8% in the previous month. Fuel and power prices increased 0.2 % from a deflation of 0.7% in February 2025. Prices of manufactured goods too increased 3.07% in March 2025, from 2.86% in the previous month. WPI food index increased at a slower pace of 4.66% in March 2025 from 5.9% in the previous month.
Economists agreed that the inflation in the coming months is also expected to be under 4 %, which they say would prompt a 50 bps rate cut.
Published – April 15, 2025 08:04 pm IST
