New Delhi [India]: India’s retail inflation rate dropped to 3.16% in April 2025, down from 3.34% in March, according to data released by the Ministry of Statistics and Programme Implementation on Tuesday. This marks the lowest annual inflation rate since July 2019, signaling continued price stability in the economy.
The 18-basis point month-on-month decline is primarily attributed to falling prices in vegetables, pulses, fruits, meat and fish, personal care items, and cereals.
Food Inflation Also Softens
The Consumer Food Price Index (CFPI) for April 2025 rose by just 1.78% year-on-year, a significant moderation that brings much-needed relief amid previous concerns over food prices.
Retail inflation remains within the Reserve Bank of India’s (RBI) target range of 2–6%, last breaching the upper threshold in October 2024. Since then, inflation has consistently remained under control, aligning with the RBI’s medium-term target.
Analysts Predict Further Rate Cuts
With inflation easing, analysts expect the RBI to shift its policy focus from inflation containment to growth stimulation, especially in light of controlled food prices, a stable crude oil outlook, and favourable monsoon forecasts.
- Sujan Hajra, Chief Economist, Anand Rathi Group, remarked:
“Softening food and crude oil prices are likely to keep inflation below RBI’s 4% target, opening the door for a potential repo rate cut. However, services inflation may pressure core inflation slightly.” - Aditi Nayar, Chief Economist, ICRA, added:
“April’s benign inflation, expectations of a sub-4% print in May, and an early and above-normal monsoon, provide ample room for the MPC to prioritise growth in the June policy meeting.” - Hemant Jain, President, PHDCCI, said:
“This moderation should encourage the RBI to reduce interest rates in the upcoming policy review, which will ease industry debt and boost private consumption.” - Sankar Chakraborti, MD & CEO, Acuite Ratings and Research, forecasted:
“We expect a cumulative 50 basis points cut in the repo rate over the next few months.” - Rajani Sinha, Chief Economist, CareEdge Ratings, commented:
“While CPI inflation is expected to average 4.2% in FY26, geopolitical tensions and trade uncertainties will need close monitoring. Still, inflation moderation provides ample comfort for further rate reductions.”
RBI Outlook and Economic Implications
The RBI, which last cut the repo rate in February 2025 after holding it steady at 6.5% for 11 consecutive policy meetings, is now widely expected to deliver further rate cuts in 2025–26. This shift could spur economic growth, boost private final consumption expenditure, and ease corporate borrowing costs.
With inflation projected to remain under 4%, and the Indian Meteorological Department (IMD) forecasting a strong monsoon, the macroeconomic environment appears conducive to pro-growth monetary policy.
Key Highlights:
- April 2025 retail inflation: 3.16% (March: 3.34%)
- Lowest YoY inflation since July 2019
- Food inflation: 1.78% (YoY)
- RBI target band: 2–6%, with a 4% midpoint
- Analysts expect 50 bps further repo rate cuts in FY26
- Strong monsoon forecast to further cool food inflation