India’s retail inflation, based on the Consumer Price Index (CPI), for January stood at 4.31 per cent, dropping significantly from 5.22 per cent in December, data released by the Ministry of Statistics & Programme Implementation showed on Monday. This is down 91 basis points in comparison to December 2024 and is the lowest year-on-year inflation after August, 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 January 2025 over January 2024 is 6.02 per cent (Provisional). Corresponding inflation rates for rural areas stood at 6.31 per cent, and urban inflation at 5.53 per cent, the NSO data showed. The month of January saw a sharp decline of 237 basis points in food inflation in comparison to December 2024.
A significant decline in headline and food inflation in the rural sector was observed in January 2025 at 4.64 per cent (provisional) while the same was 5.76 per cent in December 2024. Urban inflation was at 3.87 per cent (Provisional) in January 2025 from 4.58 per cent in December 2024.
Vegetable inflation dropped to 11.35 per cent in January from 26.56 per cent in December, pulse inflation stood at 2.59 per cent as against 3.83 per cent in December. While Cereals and Products inflation came in at 6.24 per cent, milk and products inflation stood at 2.85 per cent. Fuel and light inflation came in at -1.38 per cent.
Per the NSO data, housing inflation remained stable at 2.76 per cent from 2.71 per cent in December, while clothing and footwear inflation stood at 2.68, slightly lower than 2.74 per cent in December 2024.
Reacting on the January inflation data, Suman Chowdhury, Executive Director & Chief Economist, Acuité Ratings & Research, said, “January’2025 inflation came in at a five-month low of 4.31 per cent which was better than expected, with a sharp seasonal reduction in food inflation to 6.0 per cent from 8.3 per cent in Dec’2025. This is clearly driven by the decline in vegetable prices with the arrival of the winter harvest. The steep correction in tomato, onion, and potato prices—key CPIF components—has contributed to this downward trajectory in food inflation. Additionally, a decline in pulses inflation, supported by tariff-free imports and strong harvest expectations, has also helped ease the food price pressures. However, the inflation in edible oils is showing an increasing trend and stood at 15.6 per cent in Jan’2025.”
Looking ahead, he added that rabi sowing as per expectations and vegetable prices continuing to drop further in Feb’25 should help keep the headline inflation in check for the coming two months.