India’s retail inflation fell to 2.82% in May 2025—the lowest level recorded since February 2019—signalling a major cooling in price pressures, especially in food.

This sharp dip from April’s 3.16% was largely driven by a steep fall in food inflation, which dropped to just 0.99%—the lowest since October 2021. In April, food inflation stood at 1.78%.

Rural inflation eased to 2.59% from 2.92% in April, while urban inflation declined to 3.07% from 3.36%. Food inflation in both rural and urban areas hovered around 0.95% and 0.96%, respectively.

Among major categories, vegetable prices plunged 13.70% year-on-year, pulses fell 8.22%, and cereals also saw easing pressure. Fuel and light inflation moderated to 2.78%, though housing inflation inched up slightly to 3.16%.

Inflation for services like education, health, and transport remained higher—at 4.12%, 4.34%, and 3.85%, respectively—but didn’t impact the broader trend of disinflation.

The sharp fall is partly attributed to a favourable base effect and falling prices of essential food items. The data was released by the Ministry of Statistics and Programme Implementation (MoSPI) at 4 PM.

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