India's retail inflation dips to 7-month low of 3.61% in February: Govt data

Retail inflation in India slipped to a seven-month low of 3.61% in February 2025, down from 4.26% in January, driven by a sharp decline in food prices, according to government data released on Wednesday.

The year-on-year inflation rate, based on the All India Consumer Price Index (CPI), recorded a provisional 3.61% for February 2025 compared to the same month last year. This is the lowest headline inflation since July 2024.

Food inflation, measured by the All India Consumer Food Price Index (CFPI), fell to 3.75% in February 2025 from 5.97% in January, showed the data released by the National Statistics Office (NSO).

"A sharp decline of 222 basis point is observed in food inflation in February, 2025 in comparison to January, 2025. The food inflation in February, 2025 is the lowest after May, 2023," a government release said.

Rural areas saw food inflation ease to 4.06% from 6.31%, while urban food inflation dropped to 3.20% from 5.53% over the same period.

The NSO attributed the signficant decline in headline inflation and food inflation during February to decline in inflation of vegetables, egg, meat & fish, pulses and products, and milk and poducts.

Housing inflation, tracked only for urban areas, edged up slightly to 2.91% from 2.82% in January.

Despite the overall decline, certain items recorded high inflation rates. The top five items with the steepest year-on-year price increases in February 2025 were coconut oil (54.48%), coconut (41.61%), gold (35.56%), silver (30.89%), and onion (30.42%).

The RBI, which has been mandated to ensure retail inflation remains at 4 per cent (+/- 2 per cent), has reduced the short-term lending rate (repo) by 25 basis points last month on easing concerns on the inflation front.

The central bank is scheduled to announce the next set of bi-monthly monetary policy on April 9.