India’s retail inflation cooled further to 3.34% in March 2025, the lowest since August 2019, according to data released by the Ministry of Statistics and Programme Implementation. The decline of 27 basis points from February’s 3.61% headline inflation was primarily driven by a steep fall in food prices.
Key drivers of March CPI breakdown:
- Food Inflation: Dropped significantly to 2.69% in March, down from 3.75% in February — a 106 basis point slide. This is the lowest food inflation rate since November 2021.
- Vegetables: Inflation fell by 6.30% in rural areas and 8.22% in urban zones, pushing down the combined index for vegetables to 182.3.
- Eggs: Notched a deflation of 3.84% in rural and 2.06% in urban, contributing to an overall fall of 3.16%.
- Pulses and Products: Witnessed deflation of 2.70% in rural and 2.78% in urban markets.
- Milk and Products: Mild inflation of 2.56% YoY.
- Fruits and Oils: In contrast, inflation surged in oils & fats (18.41%) and fruits (16.67%) due to supply constraints.
Sectoral Inflation (YoY):
- Health: 4.26% (up from 4.12% in Feb)
- Education: 3.98%
- Housing: 3.03%
- Fuel & Light: Turned inflationary again at 1.48% (from deflation of -1.33% last month)
- Transport & Communication: 3.30%
Top Five Items with Highest Inflation:
- Coconut oil (56.81%), Coconut (42.05%), Gold (34.09%), Silver (31.57%), Grapes (25.55%)
Lowest Inflation/Deflation Items:
- Ginger (-38.11%), Tomato (-34.96%), Cauliflower (-25.99%), Jeera (-25.86%), Garlic (-25.22%)
Rural vs Urban Inflation:
- Rural CPI: 3.25% (down from 3.79% in Feb)
- Urban CPI: 3.43% (slightly up from 3.32% in Feb)
The data indicates robust moderation in essential commodity prices even as service sector inflation (like health and education) remains elevated. The CPI trend is likely to influence the monetary policy outlook going forward.
