India's Inflation Set to Dip Below 4%: A Promising Outlook for FY2025-26

India's inflation rate is projected to remain below 4% during the first half of FY2025-26, marking a significant milestone in the country's economic trajectory. According to a report by the State Bank of India (SBI), this trend reflects the impact of global trade dynamics and domestic policy measures aimed at stabilizing prices.

Key Highlights:
- The consumer price index (CPI) inflation is expected to fall to 3.8% in the fourth quarter of FY2024-25, with an average inflation rate of 4.6% for the full fiscal year.
- For FY2025-26, inflation is anticipated to settle between 3.9% and 4.0%, marking the first time in recent years that inflation remains below 4% for two consecutive quarters.
- Core inflation, excluding food and fuel prices, is likely to stay within the range of 4.2% to 4.3%.
- The report attributes this trend to reciprocal tariffs imposed by the United States on other economies, which may lead to increased imports at lower prices, thereby reducing inflation in India.
- Headline inflation is expected to continue its downward trajectory until September or October 2025, with a potential rise thereafter.

Sources: Times Now, Economic Times, SBI Official Reports.