India’s retail inflation, based on the Consumer Price Index (CPI), for February stood at 3.61 per cent, dropping significantly from 4.31 per cent in January, data released by the Ministry of Statistics & Programme Implementation showed on Wednesday. This is down 65 basis points in comparison to January 2025. This is the lowest year-on-year inflation after July 2024. CPI inflation in October had reached a 14-month high of 6.21 per cent.
The YoY inflation rate based on All India Consumer Food Price Index (CFPI) for the month of February 2025 over February 2024 is 3.75 per cent (Provisional). Corresponding inflation rates for rural areas stood at 4.06 per cent, and urban inflation at 3.20 per cent, the NSO data showed.. All India inflation rates for CPI (General) and CFPI over the last 13 months are shown below. February saw a sharp decline of 222 basis points in food inflation in comparison to January 2025. The food inflation in February is the lowest after May 2023.
A significant decline in headline and food inflation in the rural sector was observed in February 2025 at 3.79 per cent (provisional) while the same was 4.59 per cent in January 2025. Urban inflation was at 3.32 per cent (provision) in February 2025 from 3.87 per cent in January 2025.
Vegetable inflation dropped drastically to -1.07 per cent in February from 11.35 per cent in January, pulses and products inflation stood at -0.35 per cent as against 2.59 per cent in January. While Cereals and Products inflation came in at 6.10 per cent, milk and products inflation stood at 2.68 per cent. Fuel and light inflation came in at -1.33 per cent.
According to the NSO data, housing inflation came in at 2.91 per cent in February from 2.76 per cent in January, while clothing and footwear inflation remained stable at 2.68 per cent. Inflation for health was at 4.12 per cent in February and education inflation came in at 3.83 per cent.
Reacting on the February inflation data, Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group, said, “The decline was primarily driven by easing food inflation, with vegetable prices turning negative for the first time in 20 months. With inflation trending lower than anticipated, the average CPI for the quarter is now expected to fall below the RBI’s initial projection of 4.4 per cent. Easing food prices, coupled with lower global crude oil prices, have provided a supportive backdrop for inflation to align more closely with the RBI’s 4 per cent target.
“Against this backdrop, the RBI, which recently cut the repo rate by 25 basis points and implemented liquidity measures to address the system’s deficit, is likely to maintain its easing cycle. The central bank’s stance is influenced by growing concerns over the economic growth outlook, given rising global trade uncertainties and the increasing prevalence of protectionist policies,” he added.
