Retail inflation eases to five-month low of 4.31% in January 2025

India’s retail inflation cooled to a five-month low of 4.31% in January from 5.22% in December 2024, with food prices rising 6%, compared with an 8.4% rise in the previous month, which also marked the slowest uptick since August 2024.

The price rise faced by urban consumers in January dropped sharply to 3.87% — below the central bank’s 4% median target for inflation. For rural consumers, inflation remained above the 4% mark at 4.64%, but this was still significantly lower than the December pace of 5.8%.

Food inflation trends also varied for urban and rural India, with cities reporting a 5.5% rise in prices, while rural areas still faced a higher inflation of 6.3%.

“The significant decline in headline inflation and food inflation during the month of January is mainly attributed to decline in inflation of Vegetables, Egg, Pulses & Products, Cereals and Products, Education, Clothing and Health,” the National Statistics Office said in a statement.

The five items that recorded the highest inflation in January were coconut oil (54.2%), potato (49.6%), coconut (38.7%), garlic (30.7%) and peas (30.2%).

On a month on month basis, the Consumer Price Index for January was 0.97% lower, while the Consumer Food Price Index (CFPI) had eased 2.9%.