synopsis

 India’s retail inflation eased to 3.16% in April, its lowest since July 2019. Driven by falling food prices, inflation remains within RBI’s comfort zone, supporting forecasts of stability in FY26 amid a normal monsoon. 

Retail inflation in India fell to 3.16 per cent in April from 3.34 per cent in March, according to official data released by the Ministry of Statistics and Programme Implementation on Tuesday.

Effectively, headline inflation declined by 18 basis points in April 2025 compared to March 2025. According to the government, this is the lowest year-on-year inflation rate since July 2019.

The year-on-year inflation rate based on the All-India Consumer Food Price Index (CFPI) for April 2025 over April 2024 stands at 1.78 per cent (provisional).

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The significant decline in headline and food inflation during April 2025 is mainly attributed to a drop in prices of vegetables, pulses and related products, fruits, meat and fish, personal care items, and cereals and their products.

Retail inflation last breached the Reserve Bank of India's 6 per cent upper tolerance level in October 2024. Since then, it has remained within the 2–6 per cent range, which the RBI considers manageable.

Food prices have been a key concern for Indian policymakers, who aim to maintain retail inflation around 4 per cent.

While inflation remains a challenge for many economies, including advanced ones, India has largely managed to steer its inflation path well. The RBI held its benchmark repo rate steady at 6.5 per cent for eleven consecutive reviews before cutting it for the first time in about five years in February 2025.

After the RBI’s April monetary policy review, the central bank said that inflation is expected to remain under control in the financial year 2025–26.

RBI Governor Sanjay Malhotra projected annual Consumer Price Index (CPI) inflation at 4.0 per cent, assuming a normal monsoon. CPI inflation is expected to be 3.6 per cent in Q1, 3.9 per cent in Q2, 3.8 per cent in Q3, and 4.4 per cent in Q4, with risks evenly balanced.