CPI Data: India Retail Inflation Sees Sharp 65 Basis Point Drop in February 2025, Food Inflation Hits 21-Month Low

India's retail inflation, measured by the Consumer Price Index (CPI) data, stood at 3.61% in February 2025, marking a sharp 65 basis point decline from January 2025. This is the lowest year-on-year inflation rate since July 2024, as per the latest CPI data released by the Ministry of Statistics and Programme Implementation, National Statistics Office.

The declining inflation trend is primarily attributed to a sharp fall in food inflation, particularly in essential commodities like vegetables, eggs, meat, pulses and milk products. The data further highlights differences in rural and urban inflation trends, with both sectors experiencing a noticeable decline.

Food Inflation in February 2025 Hits Lowest Since May 2023

The Consumer Food Price Index (CFPI)-based food inflation for February 2025 stood at 3.75%, significantly lower than January 2025. This represents a sharp 222 basis point decrease, making it the lowest food inflation rate since May 2023.

Rural vs Urban Food Inflation

• Rural Food Inflation: 4.06% (down from 6.31% in January 2025)
• Urban Food Inflation: 3.20% (down from 5.53% in January 2025)

This notable reduction in food inflation is a major contributing factor to the overall decline in India’s retail inflation in February 2025.

Rural Inflation Sees Sharp Decline

The CPI data for February 2025 reveals that rural inflation dropped significantly to 3.79%, down from 4.59% in January 2025. This decline is largely driven by the decrease in food inflation, which fell from 6.31% in January 2025 to 4.06% in February 2025.

A substantial reduction in inflation rates for vegetables, pulses and dairy products has contributed to this downward trend. The rural sector has benefited from stable supply chains and improved agricultural output, helping curb price fluctuations.

Urban Inflation Falls Below 3.5% in February 2025

For the urban sector, the CPI-based retail inflation fell from 3.87% in January 2025 to 3.32% in February 2025. Similarly, urban food inflation dropped from 5.53% to 3.20%, indicating a steady decline in price pressures across major cities.

This downward trend in urban inflation reflects stabilised prices in essential commodities, as well as improved market conditions in metropolitan areas. The fall in transportation and fuel costs has also contributed to easing inflationary pressure in urban regions.

Sector-Wise Inflation Trends: Housing, Fuel, Health & Education

Apart from the CPI data and India retail inflation for February 2025, the report highlights the following sector-wise inflation trends:

• Housing Inflation: Increased slightly to 2.91% in February 2025, up from 2.82% in January 2025. This index is measured only for urban areas.
• Fuel & Light Inflation: Continued to remain negative at -1.33%, slightly improving from -1.49% in January 2025. This indicates a decline in fuel prices across both rural and urban sectors.
• Education Inflation: Remained stable at 3.83%, unchanged from January 2025.
• Health Inflation: Rose to 4.12%, slightly up from 3.97% in January 2025, indicating increased healthcare costs across India.
• Transport & Communication Inflation: Increased marginally to 2.87% in February 2025, compared to 2.76% in January 2025.

Top Items with Highest & Lowest Inflation in February 2025

Top 5 Items with Highest Inflation

• Coconut oil – 54.48%
• Coconut – 41.61%
• Gold – 35.56%
• Silver – 30.89%
• Onion – 30.42%

Top 5 Items with Lowest Inflation

• Ginger – (-35.81%)
• Jeera (Cumin) – (-28.77%)
• Tomato – (-28.51%)
• Cauliflower – (-21.19%)
• Garlic – (-20.32%)

CPI Data Shows Positive Signs for Inflation Control

The CPI data for February 2025 highlights a steady decline in India’s retail inflation, reaching its lowest level since July 2024. The significant drop in food inflation and overall rural and urban inflation rates signals a positive trend for price stability in the country.

With inflation under control, consumers may experience relief from price hikes, particularly in food and essential commodities. The next CPI report for March 2025 is scheduled for release on April 14, 2025, providing further insights into India’s inflation trajectory.