India’s Retail Inflation Drops in February

India’s retail inflation, measured by the Consumer Price Index (CPI), fell to 3.61% in February 2025 from 5.09% a year ago, according to data from the National Statistics Office (NSO). This was lower than economists' estimates of 3.85% and marked a decline from January’s 4.26%. Year-on-year inflation for February stood at 3.75%.

Food inflation saw a major drop to 3.75% from 6.02% in January, while rural and urban inflation eased to 3.79% and 3.32%, respectively. Vegetable prices fell sharply, with inflation dropping to -1.07%, while pulses inflation turned negative at -0.35%. Fuel and light inflation also remained in deflationary territory at -1.33%. Housing inflation rose slightly to 2.91%, while clothing and footwear inflation stayed at 2.68%.

The NSO attributed this decline in inflation mainly to falling prices of vegetables, eggs, meat, fish, pulses, and dairy products, making February’s food inflation the lowest since May 2023.