India’s retail inflation cooled to 3.34% in March 2025, marking the lowest level in over five years and offering a major relief to consumers and policymakers alike. The sharp dip is largely attributed to a significant moderation in food prices, particularly in staples like vegetables, pulses, and edible oils.
The latest data from the Ministry of Statistics and Programme Implementation shows that Consumer Price Index (CPI) inflation has now remained within the Reserve Bank of India’s (RBI) comfort zone of 2-6% for several consecutive months. March’s reading also stands well below the previous month’s 5.09%, signaling a strong disinflationary trend.
Economists say the sharp fall may open the door for the RBI to consider interest rate cuts in the upcoming monetary policy reviews. With inflation under control and growth still facing headwinds from global uncertainty, the central bank may look to ease rates to stimulate domestic consumption and investment.
“This is a significant development,” said a senior economist at a leading financial institution. “A CPI reading of 3.34% not only boosts purchasing power but also gives monetary policymakers more room to maneuver in supporting growth.”
Food inflation, which accounts for nearly half of the CPI basket, fell markedly thanks to a strong winter harvest and easing supply chain pressures. The government’s proactive import management and buffer stock releases have also helped keep essential commodity prices in check.
As the country heads into the crucial summer season, the India Meteorological Department’s recent forecast of an above-average monsoon adds further optimism for continued price stability and improved agricultural output in the months ahead.
With inflation at multi-year lows and global interest rates stabilizing, all eyes are now on the RBI’s next policy move, which could set the tone for India’s economic trajectory in 2025.
