April CPI Inflation Lowest Since July 2019, Stays Below RBI Target For 3rd Month

India’s retail inflation eased to 3.16% in April 2025, the lowest figure July 2019. The inflation was at 3.34% in March and 3.61% in February, marking the third consecutive month that CPI has remained below the Reserve Bank of India’s medium-term target of 4%, bolstering the case for the central bank to keep cutting policy rates. 

Last month, the Monetary Policy Committee reduced the repo rate by 25 basis points for the second consecutive time and shifted its stance to accommodative. It lowered the average inflation forecast for 2025–26 by 20 basis points to 4%. The downward revision was concentrated in the first half of the financial year. Inflation for the October–December quarter was left unchanged at 3.8%, while the forecast for January–March was revised upwards to 4.4% from 4.2%, indicating possible inflationary pressures later in the year.

The next CPI release, for May 2025, is scheduled on June 12, after RBI’s Monetary Policy Committee’s bi-monthly meeting to be held June 4-6.

The moderation in headline inflation was primarily driven by a sharp decline in food prices, led by vegetables, pulses, fruits, meat and fish, personal care items, and cereals. The Consumer Food Price Index registered an annual increase of 1.78% in April, down from 2.69% in March. This is the lowest level of food inflation recorded since October 2021. 

Core inflation, which excludes food and fuel components, remained steady at 4.1% in April, unchanged from the previous month. Although core prices showed no variation, the easing in food inflation placed downward pressure on the overall index.

On a month-on-month basis, the general CPI index increased by 0.31%, while the food index declined by 0.15%.