Inflation Hits Six-Year Low: India’s April CPI Eases to 3.16% as Food Prices Cool Sharply

Unknown Apr 02, 2026 2 Views

India’s retail inflation cooled to a near six-year low in April 2025, with the Consumer Price Index (CPI) rising just 3.16% year-on-year-well below the Reuters forecast of 3.27%. The sharp deceleration is credited to a dramatic slowdown in food inflation, which dropped to 1.78%, its lowest level since October 2021. This marks the third consecutive month that headline inflation has remained below the Reserve Bank of India’s 4% target, setting a positive tone for the economy and monetary policy outlook.

Key Highlights:

Headline CPI at 3.16%: April’s retail inflation fell to its lowest since July 2019, down 18 basis points from March’s 3.34%, and beating market expectations.
Food Inflation Plummets: The Consumer Food Price Index (CFPI) inflation plunged to 1.78% from 2.69% in March, with rural food inflation at 1.85% and urban at 1.64%. This sharp drop was driven by significant declines in prices of vegetables (down nearly 11% year-on-year), pulses, fruits, meat, fish, and cereals.
Rural vs Urban: Rural inflation eased to 2.92% (from 3.25% in March), while urban inflation dipped to 3.36% (from 3.43%).
Core Inflation Steady: Core CPI inflation (excluding food and fuel) was estimated by economists at 4–4.1%, indicating stable underlying price pressures.
Sectoral Trends: Housing inflation was 3%, health 4.25%, education 4.13%, and fuel and light 2.92%. Clothing and footwear inflation stood at 2.67%.
Policy Implications: Economists suggest the benign inflation print paves the way for a possible RBI rate cut at the June meeting, especially with forecasts of a strong monsoon and easing commodity prices supporting a favorable inflation outlook for the year.