New Delhi [India], May 13 : India's retail inflation has moderated to 3.16% in April, down from 3.34% in March, according to official data released by the Ministry of Statistics and Programme Implementation on Tuesday.
This is the lowest year-on-year inflation since July 2019. The decline in inflation is attributed to a decrease in prices of vegetables, pulses and products, fruits, meat and fish, personal care and effects and cereals and products.
Effectively, headline inflation declined 18 basis points in April 2025 compared to March 2025.
The year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for April 2025 over April 2024 is 1.78 per cent (Provisional).
The inflation rate is within the Reserve Bank of India's (RBI) manageable range of 2-6%
Retail inflation last breached the Reserve Bank of India's 6 per cent upper tolerance level in October 2024. Since then, it has been in the 2-6 per cent range, which the RBI considers manageable.
Food prices were a concern for Indian policymakers, who wished to sustain retail inflation around 4 per cent.
After the RBI's April monetary policy review meeting, the central bank said that inflation is expected to remain under control in the financial year 2025-26.
Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory well. The RBI held its benchmark repo rate steady at 6.5 per cent for the eleventh consecutive time, before cutting it first time in about five years in February 2025.
Analysts expect inflation to remain under control, allowing the RBI to focus on supporting economic growth. They expect the RBI to cut interest rates further, citing controlled inflation and a focus on growth.
Moreover, a good monsoon forecast is expected to cool down food inflation further. Moderating inflation is expected to bolster economic growth and private final consumption expenditure
Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Group, said, "Softening food and crude oil prices are likely to keep inflation below the RBI's 4 per cent target, creating room for a potential repo rate cut in the upcoming MPC meeting. However, steadily rising service inflation may exert some pressure on core inflation. Overall, with inflation under control, the policy focus is expected to shift more firmly towards supporting growth--an environment that, along with a likely decline in interest rates, bodes well for corporate earnings and the Indian equity market outlook."
Aditi Nayar, Chief Economist and Head-Research and Outreach at ICRA, said, "The benign April 2025 headline inflation print, expectations of another sub-4 per cent print in May 2025, the dip in crude oil prices in the recent weeks, and the IMD's forecast of an above normal monsoon in 2025 as well as an early onset in Kerala will allow the MPC to continue to place a higher weight on growth vis-a-vis inflation, when it meets in June 2025."
Hemant Jain, President, PHDCCI, said, "This (moderation in retail inflation) is expected to further comfort RBI to reduce interest rates, in the next bi-monthly MPC meeting, which will reduce industry debt burden... Going ahead, we expect food inflation to cool down further given the anticipation of a good monsoon. Further, the crude prices are expected to be range-bound between USD 60 and USD 65 per barrel in the short to medium term, further boosting private final consumption expenditure and therefore bolstering economic growth."
Sankar Chakraborti, MD and CEO, Acuite Ratings and Research, said, "...we expect the Reserve Bank of India to cut the repo rate by an additional 50 basis points cumulatively in the coming months."
Rajani Sinha, Chief Economist, CareEdge Ratings, said, "For FY26, we expect CPI inflation to average 4.2 per cent. While commodity prices have cooled off, trade policy uncertainties and geopolitical tensions remain monitorable, given their implications on global supply chains. On the monetary policy front, moderating inflation should provide comfort to the MPC in undertaking further rate cuts. We expect a further 50 bps reduction in the policy rate in FY26".