India’s Consumer Price Index (CPI)-based inflation declined to 3.61% in February 2025, marking a 65 basis point drop from January 2025. This is the lowest year-on-year inflation recorded since July 2024. The decline was largely attributed to falling prices in key food categories, as per data released by the Ministry of Statistics & Programme Implementation (MoSPI).
Food inflation, measured by the Consumer Food Price Index (CFPI), fell sharply to 3.75% in February from 5.97% in January 2025, registering a 222 basis point decline. The rural food inflation stood at 4.06%, while urban food inflation dropped to 3.20%.
Sector-wise Breakdown:
- Rural Inflation: Decreased from 4.59% in January to 3.79% in February 2025.
- Urban Inflation: Declined from 3.87% in January to 3.32% in February 2025.
- Housing Inflation: Slightly increased to 2.91% from 2.82% in January.
- Fuel & Light Inflation: Remained in negative territory at -1.33%, marginally improving from -1.49% in January.
- Education Inflation: Held steady at 3.83%.
- Health Inflation: Increased slightly to 4.12% from 3.97% in January.
- Transport & Communication Inflation: Rose to 2.87% from 2.76% in January.
The significant drop in food inflation was driven by lower prices in vegetables, eggs, meat, pulses, and dairy products. However, some essential commodities like coconut oil (54.48%), coconut (41.61%), gold (35.56%), and onion (30.42%) saw the highest inflation.
Conversely, items with the lowest inflation rates included ginger (-35.81%), jeera (-28.77%), tomato (-28.51%), cauliflower (-21.19%), and garlic (-20.32%).
With this decline in inflation, analysts expect the Reserve Bank of India (RBI) to maintain its accommodative stance while monitoring global inflationary trends and domestic demand recovery. The next CPI data release for March 2025 is scheduled for April 14, 2025.
