Retail inflation: Big relief on inflation front, retail inflation came to 6 years low, 3.16% in April

The rate of retail inflation came down to about 6 years in April to 3.16 percent due to softening of vegetables, fruits and pulses prices. This has created a sufficient scope for another cut in the repo rate for the Reserve Bank of India in the monetary policy review of June. According to the official data released on Tuesday, inflation based on the Consumer Price Index (CPI) in April was 3.16 percent, the lowest level since July 2019. It was 3.15 percent in July 2019. Retail inflation in March 2025 was 3.34 percent and 4.83 percent in April 2024.

According to data released by the National Statistics Office (NSO), the food inflation has come down to 1.78 percent last month, the lowest level after October 2021. Food inflation was 2.69 percent in March as against 8.7 percent in April a year ago.

Retail inflation figures remain in the satisfactory realm of Reserve Bank of India (RBI). The government has entrusted the RBI to maintain inflation at four percent with two percent decreased and four percent. After the price situation improved, the RBI has cut the major interest rate in two installments by 0.50 percent.

The central bank has estimated four percent of retail inflation for FY 2025-26. Its 3.6 percent in the first quarter, 3.9 percent in the second quarter, 3.8 percent in the third quarter and 4.4 percent in the fourth quarter.

What are the price reduced

The NSO stated that the significant decline in main inflation and food inflation in April 2025 is mainly due to the decrease in vegetables, pulses and products, fruits, meat and fish, personal care products and grain prices. Potatoes (12.7 percent), tomato (33.21 percent), chicken (6.78 percent), arhar (14.27 percent) and cumin (20.79 percent) have been reduced during April during April. However, last month, mustard oil recorded 19.6 percent, refined oil (sunflower, soybean) 23.75 percent, apple 17 percent and onion 2.94 percent.

Where is the lowest inflation rate

The rural inflation was 2.92 percent in April, compared to 3.25 percent in March. The urban inflation also declined slightly from 3.43 percent in March 2025 to 3.36 percent in April. According to official figures, Kerala was the highest inflation rate of 5.94 percent, while the lowest inflation was 1.26 percent in Telangana. Aditi Nair, chief economist of rating agency Ecra Limited, said on these figures that the average inflation in FY 2025-26 will be 3.5 percent, which is much lower than the Estimates of RBI’s Monetary Policy Committee (MPC), which makes a scope of an additional reduction of 0.75 percent in the interest rate in this calendar year.

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Possibility of cut in repo rate

Nair said that the policy review of June 2025 is likely to be cut by 0.25 percent. After this, the policy review of August and October 2025 may also reduce the repo rate by 0.25 percent. ”However, Nair said that if the economic growth rate in the March quarter does not exceed the 6.2 percent increase in the December quarter, then the MPC can decide a 0.50 percent reduction in the upcoming review itself. The inflation rate of ‘fuel and light’ segment in April was 2.92 percent on an annual basis, compared to 1.42 percent in March.

Inflation in ‘Transport and Communication’ section was 3.73 percent in April, compared to 3.36 percent in March. Sujan Hazra, Chief Economist and Executive Director of Anand Rathi Group, said that these figures create scope for rate cuts in the upcoming meeting of the Reserve Bank, but increasing inflation of service section may cause some pressure on main inflation.

Hazra said that with the control of inflation, the center of monetary policy can now move towards support. This will be favorable for the income and equity market landscape of companies. The data for calculation of retail inflation is collected from selected 1,114 urban markets and 1,181 villages of all states and union territories. Language edited by: Sudhir Sharma