Retail inflation dropped slightly to 3.34% in March, hitting its lowest level in almost six years, mainly due to falling prices of vegetables and protein-rich foods like eggs and pulses.
In comparison, retail inflation was 3.61% in February 2025 and 4.85% in March 2024. The last time inflation was this low was in August 2019, when it stood at 3.28%.
Food prices saw a significant drop. Food inflation came down to 2.69% in March, compared to 3.75% in February and 8.52% a year ago in March 2024.
Last week, the Reserve Bank of India (RBI) responded to easing inflation by cutting the repo rate (the rate at which it lends to banks) by 25 basis points to support the economy.
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For the financial year 2025-26, the RBI has projected retail inflation (CPI) at an average of 4%, with:
- 3.6% in Q1
- 3.9% in Q2
- 3.8% in Q3
- 4.4% in Q4
The central bank noted that the risks are balanced.
At the same time, wholesale inflation also eased. It dropped to 2.05% in March, down from 2.38% in February. This is the lowest WPI inflation in six months. The prices of vegetables, potatoes, and other food items were the main contributors to this drop. A year ago, in March 2024, wholesale inflation was only 0.26%.
