The food inflation in January 2025 at 6.02 per cent was the lowest after August 2024
India’s retail inflation, based on the Consumer Price Index (CPI), fell to 4.31 per cent in January 2025, down to a five-month low, as prices of vegetables and pulses eased during the month bringing relief to household budgets. The figures are as per the data by the Ministry of Statistics and Programme Implementation (MoSPI)
The Ministry stated that there is a decline of 91 basis points in headline inflation of January 2025 in comparison to December 2024. It is the lowest year-on-year inflation after August 2024. The food inflation in January 2025 at 6.02 per cent was the lowest after August 2024.
“January CPI inflation moderated sharper than expected led by significant easing of food prices. Meanwhile, core inflation inched up a bit to 3.7 per cent. Overall, we expect the inflation trajectory to remain benign in the months ahead to provide room for another 25bp of rate cut by the MPC. However, the pace of Indian Rupee depreciation will need to be closely watched for spillovers on domestic inflation,” stated Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.
As far as rural inflation is concerned, the Ministry stated that a significant decline in headline and food inflation in the rural sector was observed in January 2025. It was 4.64 per cent (provisional) in January 2025 while the same was 5.76 per cent in December 2024.
“In fiscal 2026, assuming a normal monsoon, we expect food inflation to ease further on a high base of the current fiscal, supported by softer global food prices. But we believe core inflation will rise on a low base, though it will still be benign on account of soft global commodity prices. Overall, we expect headline inflation to average 4.4 per cent in fiscal 2026 vs our projection of 4.7 per cent this fiscal,” stated Dharmakirti Joshi, Chief Economist, Crisil.
Sharp decline from 4.58 per cent in December 2024 to 3.87 per cent (provisional) in January 2025 was observed in headline inflation of urban sector. “Inflation in clothing and footwear segment also softened from 2.7 per cent in December 2024 to 2.6 per cent in January 2025. Going ahead, assuming a normal monsoon and good kharif production, we expect the CPI inflation to remain well within the RBI’s target band, said Hemant Jain, President, PHD Chamber of Commerce and Industry (PHDCCI) in a press statement.
The top five items showing the highest year on year Inflation at all India level in January 2025 are coconut oil (54.20 per cent), potato (49.61 per cent), coconut (38.71 per cent), garlic (30.65 per cent), peas (vegetables) (30.17 per cent), as per the official data.
