India's retail inflation dropped to a six-year low of 3.16% in April, led by a sharp fall in food prices—especially vegetables, cereals, and pulses. Food inflation plunged to 1.78%, down from 8.7% a year ago

Metro India News | Hyderabad 

In April 2025, India’s retail inflation reached a six-year low of 3.16%, primarily driven by a substantial drop in food prices, particularly in vegetables, cereals, and pulses.  Pulses saw a 5.23% deflation compared to the same month last year. Similarly, cereal inflation has declined to a 35-month low of 5.3%, heavily influenced by improved kharif (monsoon) output. The early harvest of crops coupled with efficient procurement strategies led to an oversupply, effectively controlling price surges.

The drop in prices marks a significant decline from the 3.34% recorded in March 2025 and continues a trend of reduced inflation that has persisted for three consecutive months beneath the Reserve Bank of India’s  target of 4%. Food inflation specifically decreased to 1.78%, a stark contrast to last year’s rate of 8.7% .

This is the lowest since October 2021, while the overall decline in consumer prices offers policymakers potential opportunities for interest rate cuts. Notably, rural inflation fell more sharply at 2.92%, compared to urban inflation at 3.36%.

The favorable harvest season amid adverse weather conditions, such as heat waves and unseasonal rainfall, aided in maintaining food supply stability, which is crucial for sustaining the broader disinflationary trend. The most notable reduction in inflation came from vegetable prices, which experienced an 11% year-on-year decline. This decrease marks the most substantial drop observed since February 2023.

With a consistent supply following advantageous harvest conditions, consumers benefited from reduced costs, which alleviated some financial strain associated with food purchasing. The decrease in inflation was not confined to food items alone; for the first time in 22 months, prices for fruits, meat, and fish also fell. The consistent inflation reduction allows the Reserve Bank of India (RBI) to explore a more accommodating monetary policy stance, potentially leading to interest rate cuts, thereby stimulating further economic recovery.

— By Brickwork Ratings India  Pvt