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India’s CPI Inflation Eases to 4.3% in January

15 February 20251 min read
ECONOMYIndia’s CPIInflation Eases to4.3% in January15 February 2025safalsetu.com

Why in the news

Retail inflation cooled to 4.3% in January, thanks to a good winter vegetable harvest, but imported price pressures and a weak rupee remain risks.

Key facts

  • CPI inflation: 4.3%, a five-month low, near RBI’s 4% target.
  • Urban: 3.9%; rural: 4.6%.
  • RBI expects an average of 4.4% this quarter and 4.2% in 2025-26.
  • Food inflation also dropped, easing household budgets.

Risks

RiskDetail
RupeeLost nearly 4% against the dollar in late 2024-25, raising import costs
Edible oilsUp 15.6% in January; wholesale prices jumped 33.1%; 60% of demand is imported
WeatherHeatwaves or a weak monsoon could undo food price gains

Policy suggestions

  • Finance Minister Nirmala Sitharaman was confident food prices would stay in check in 2025.
  • Possible indirect tax relief: fuel levies, edible oil import duties, GST cuts.
  • Easing prices could gradually revive consumption and growth.

Exam angle

  • RBI inflation target: 4%.
  • Edible oil import dependence: 60%.

Test yourself

1. What was India's consumer price inflation in January 2025 according to these notes?

CPI inflation fell to 4.3%, a five-month low.

2. By what percentage did edible oil prices rise in January, the highest in nearly three years?

Edible oils rose 15.6%.

3. What share of India's edible oil demand is met through imports, as per these inflation notes?

Sixty percent of demand is imported.