New Delhi: Consumer prices in March decreased slightly to 3.34 per cent, marking the lowest inflation rate in almost six years. This reduction is attributed to falling prices of vegetables, eggs, and protein products. With inflation staying below the Reserve Bank of India’s median target of 4 per cent, there are growing expectations for a third interest rate cut by the central bank.
The Consumer Price Index (CPI) based inflation was 3.61 per cent in February and 4.85 per cent in March last year.
The inflation rate in March 2025 is the lowest since August 2019, when it was 3.28 per cent.
According to data released by National Statistics Office (NSO) on Tuesday, the retail food inflation in March was 2.69 per cent compared to 3.75 per cent in February and 8.52 per cent in March 2024.
Meanwhile, wholesale price inflation declined to a six-month low of 2.05 per cent in March as prices of vegetables, potato and other food items eased, another set of government data showed.
Wholesale Price Index (WPI) based inflation was 2.38 per cent in February. It was 0.26 per cent in March last year.
Last week, the Reserve Bank reduced the key short-term lending rate (repo) by 25 basis points in the wake of easing inflation.
The Reserve Bank has projected CPI inflation for the current fiscal 2025-26 at 4 per cent, with Q1 at 3.6 per cent, Q2 at 3.9 per cent, Q3 at 3.8 per cent, and Q4 at 4.4 per cent. The risks are evenly balanced.
While announcing the bi-monthly monetary policy on April 9, the RBI had indicated another rate cut as it changed the monetary stance to ‘accommodative’ from ‘neutral’.
The NSO said the significant decline in headline inflation and food inflation during March 2025 was mainly attributed to decline in inflation of vegetables, eggs, pulses and products, meat and fish, cereals and products, and milk and its products.
The decline in CPI inflation was witnessed in eggs (-3.16 per cent), vegetables (-7.04 per cent), pulses and products (-2.73 per cent), and spices (-4.92 per cent).
On the other hand, ‘oils and fats’ segment recorded highest annual inflation of 17.07 per cent in March followed by fruits at 16.27 per cent.
Urban inflation increased marginally from 3.32 per cent in February to 3.43 per cent in March 2025. However, significant decline was observed in food inflation from 3.15 per cent in February 2025 to 2.48 per cent in March, NSO said.
Further, there was decline in headline and food inflation in the rural sector. The headline inflation was 3.25 per cent in March compared to 3.79 per cent in the preceding month. The retail food inflation in the rural sector was at 2.82 per cent in March, down from 4.06 per cent in February.
NSO data also showed the highest retail inflation was in Kerala (6.59 per cent) and the lowest in Telangana (1.06 per cent)
As per the WPI data, food inflation eased to 1.57 per cent in March from 3.38 per cent in February, with vegetables seeing a sharp drop. The decline in vegetables inflation was 15.88 per cent during the month compared to 5.80 per cent in February.
Inflation in potato, which was rising in double digits since February 2024, fell in March 2025. The inflation in potato in March 2025 was in negative at 6.77 per cent.
In onion, wholesale inflation eased to 26.65 per cent in March against 48.05 per cent in February.
Manufactured products, however, saw a spike at 3.07 per cent in March compared to 2.86 per cent in February, WPI data showed.
Fuel and power too saw an uptick with a 0.20 per cent rise in March against a deflation of 0.71 per cent in February, it said.