India’s Retail Inflation Eases to 3.34% in March 2025
Why in the news
CPI inflation slid to a multi-year low, mainly because food prices eased, strengthening the case for more rate cuts.
Key facts
- Headline CPI: 3.34%, lowest in 5.5 years.
- Vegetables and pulses cooled on better rabi arrivals; eggs normalised after avian flu worries.
- Edible oils and fruits stayed sticky owing to import costs and supply bottlenecks.
- Core inflation stayed fairly stable, meaning limited pass-through of lower input costs.
| Segment | Earlier | Now |
|---|---|---|
| Rural inflation | 3.79% | 3.25% |
| Urban inflation | 3.32% | 3.43% |
| Kerala | – | 6.6% |
| Delhi | – | 1.5% |
| Telangana | – | 1.1% |
Policy angle
- Follows two 25 bps repo cuts, showing monetary transmission and a tilt towards growth.
- Economists see a further 50 bps cut and a terminal repo rate of 5.0%-5.25%.
Significance
- Room to anchor expectations below 4% and front-load infrastructure and rural spending.
- Bond yields may soften; real estate, auto and BFSI may see stronger demand.
- Rural purchasing power could support consumption-led growth in FY26.
Exam angle
- Core inflation excludes food and fuel.
- Kerala highest (6.6%); Telangana lowest (1.1%) among states quoted.