India's FY25 consumer price inflation down at 4.6%; March inflation at a 6-year low of 3.34%

Consumer price inflation in India, based on the Consumer Price Index (CPI), fell to a 6-year low of 4.6 per cent in the fiscal year 2024-25, the lowest since 2018-19. The fiscal also ended with CPI-based inflation at a 67-month low of 3.34 per cent in March 2025, down 27 basis points from the February level.

Headline inflation declined to 3.25 per cent in March from 3.79 per cent in February while food inflation dropped to 2.82 per cent from 4.06 per cent during the month.

Food price inflation based on the Consumer Food Price Index (CFPI) stood at 2.69 per cent in March 2025, down 106 basis points from the previous month and the lowest since November 2021. 

Food price inflation for the rural areas stood at 2.82 per cent while food price inflation for urban areas stood at 2.48 per cent.

The decline in food price inflation was due mainly to a drop in prices across key categories such as vegetables, eggs, pulses and products, meat and fish, cereals and its products, and milk and milk products.

There was a noticeable fall in both headline and food inflation in in rural areas.

Headline inflation in urban areas, however, rose marginally to 3.43 per cent in March from 3.32 per cent in February. Food price inflation, however, declined significantly to 2.48 per cent in March 2025 from 3.15 per cent in February.

Housing inflation for the urban sector rose slightly to 3.03 per cent in March 2025 from 2.91 per cent in February.

Inflation for the fuel and light category for both rural and urban areas rose to 1.48 per cent in March from (-) 1.33 per cent in February.

Education-related inflation saw a moderate increase to 3.98 per cent in March 2025 from 3.88 per cent in the previous month.

Health inflation based on prices in the health segment saw a mild rise to 4.26 per cent in March from 4.12 per cent in February.

Inflation related to the transport and communication segment increased to 3.30 per cent in March 2025 compared to 2.93 per cent in February.

The highest inflation rate was noted across items such as coconut oil (56.81 per cent), coconut (42.05 per cent), gold (34.09 per cent), silver (31.57 per cent), and grapes (25.55 per cent).

Items that registered the steepest decline in prices included ginger (-38.11 per cent), tomato (-34.96 per cent), cauliflower (-25.99 per cent), jeera (-25.86 per cent), and garlic (-25.22 per cent).

Consumer price inflation in India has steadily declined over the past three financial years, falling from 6.7 per cent in 2022–23 to 5.4 per cent in 2023–24, and further to 4.6 per cent in 2024–25. 

Policy makers believe this trend to continue, especially in the light of the Reserve Bank of India’s (RBI) tight money policy, although with the focus still on growth.

Market intervention by the government through increased buffer stock and timely release of essential food items into the market as also subsidised sale of foodgrains through the public distribution system have greatly helped o keep prices in check.

The government has also been periodically releasing staples like rice, wheat flour, pulses and onions at substantially reduced prices. Besides, it has simplified import duties on critical food items and prescribed stock limits to prevent hoarding and profiteering.

Besides, the government has been employing measures like targeted subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana and support prices for LPG under the Pradhan Mantri Ujjwala Yojana to protect vulnerable households.