India’s annual inflation rate, based on the Consumer Price Index (CPI), declined to 3.34% in March this year, compared to the same month of the previous year, the lowest level since August 2019, according to figures released by the Ministry of Statistics on Tuesday.
Food inflation, during March, slowed to 2.69%, which is the lowest level since November 2021. The significant decline in headline inflation and food inflation during the month of March 2025 is mainly attributed to decline in inflation of vegetables, eggs, pulses, meat & fish cereals and milk, according to the official statement.
The key items with the lowest year-on-year inflation in March are ginger (-38.11%), tomato (-34.96%), cauliflower (-25.99%), jeera (-25.86%) and garlic (-25.22%).
The year-on-year housing inflation rate for the month is 3.03%. Corresponding inflation rate for the month of February, 2025 was 2.91%. The housing index is compiled only for the urban sector.
Fuel & light inflation rate for March is 1.48%. While the education inflation rate for the month is 3.98%, the figures showed. Retail inflation in the country has been on a declining trend in recent months. The Reserve Bank’s Monetary Policy Committee has reduced its inflation forecast for 2025-26 to 4% from 4.2% earlier as the “outlook for food inflation has turned decisively positive”, RBI Governor Sanjay Malhotra said last week.
“Headline inflation moderated during January-February 2025 following a sharp correction in food inflation. The outlook for food inflation has turned decisively positive. The uncertainties regarding rabi crops have abated considerably, and the second advance estimates point to a record wheat production and higher production of key pulses over the last year,” he said.
The RBI Governor observed that along with robust kharif arrivals, this is expected to set the stage for a durable softening of food inflation.
“The sharp decline in inflation expectations in our latest survey for three months and one year ahead would also help anchor inflation expectations, going ahead,” he pointed out.
Furthermore, the fall in crude oil prices augurs well for the inflation outlook. Concerns on lingering global market uncertainties and recurrence of adverse weather-related supply disruptions, however, pose upside risks to the inflation trajectory, the RBI Governor said.
He said that taking all these factors into consideration, and assuming a normal monsoon, CPI inflation for the financial year 2025-26 is projected at 4.0%, with Q1 at 3.6%, Q2 at 3.9%, Q3 at 3.8%, and Q4 at 4.4%. The risks as evenly balanced, he maintained.