India's inflation rate cools in February, paving way for RBI rate cut

New Delhi: India's retail inflation slipped to 3.6 percent in February helped by a dip in vegetable prices, according to the data released by the National Statistics Office on Wednesday. 

Economists polled by Reuters expected a reading of 3.98 per cent for the period. The fall in inflation has raised expectations for a rate cut by the Reserve Bank of India in its next monetary policy decision on April 9. 

The consumer price index-based retail inflation was at 4.26 per cent in January and 5.09 per cent in February 2024. "A sharp decline of 222 basis points is observed in food inflation in February 2025 compared to January 2025. The food inflation in February 2025 is the lowest after May 2023," it said.

The NSO said the significant decline in headline inflation and food inflation during February is mainly attributed to the decline in inflation of vegetables, eggs, meat, fish, pulses and products, and milk products, PTI reported.

The RBI, which is mandated to ensure retail inflation remains at 4 percent (+/—2 percent), reduced the short-term lending rate (repo) by 25 basis points last month on easing concerns on the inflation front.