India's CPI Inflation Cools in February 2025: A Detailed Breakdown

India's Consumer Price Index (CPI) inflation for February 2025 showed a notable decline, reaching 3.61%, the lowest level since July 2024. This marks a 65-basis-point (bps) drop from January 2025, primarily driven by falling food prices and stable energy costs. The data indicates a period of easing inflationary pressures, offering relief to consumers and policymakers alike.

Key Trends in February 2025 CPI Data

1. Overall Inflation Decline

• The CPI inflation rate fell to 3.61%, marking a steady decline and signaling easing price pressures.

• This is the lowest inflation rate recorded since July 2024, reflecting improved supply chains and controlled demand-side pressures.

  
  

2. Food Inflation Sees Major Drop

• The Consumer Food Price Index (CFPI) stood at 3.75%, reflecting a substantial 222 bps decline from January 2025.

• Rural food inflation was 4.06%, while urban food inflation stood lower at 3.20%.

• The sharp drop was driven by falling prices in vegetables, pulses, and dairy products.

  
  

3. Sector-Wise Inflation Trends

While food inflation declined, other sectors showed varied movements:

• Rural Inflation: Declined to 3.79% from 4.59% in January.

• Urban Inflation: Dropped to 3.32% from 3.87%, suggesting easing cost pressures in cities.

• Housing Inflation: Increased slightly to 2.91% from 2.82%, indicating stability in rental and property costs.

• Fuel & Light Inflation: Remained negative at -1.33%, reflecting falling energy prices and reduced cost burdens.

• Education Inflation: Held steady at 3.83%, showing no major price fluctuations.

• Health Inflation: Rose slightly to 4.12% from 3.97%, driven by increased medical costs.

• Transport & Communication Inflation: Marginally increased to 2.87% from 2.76%, reflecting steady transportation costs.

4. Items with the Lowest Inflation (Deflationary Trends)

Several essential food items saw sharp price declines, contributing to the overall cooling of inflation:

• Ginger (-35.81%)

• Jeera (Cumin) (-28.77%)

• Tomato (-28.51%)

• Cauliflower (-21.19%)

• Garlic (-20.32%)

The significant drop in vegetable prices helped bring overall food inflation under control.

5. States with the Highest Inflation

While national inflation eased, some states continued to experience higher price pressures:

• Kerala (7.31%) – The highest inflation rate, driven by rising costs in food and housing.

• Chhattisgarh (4.89%) – Moderately high inflation due to increasing transportation and food costs.

• Karnataka (4.49%) – Higher demand for goods and services contributed to inflationary pressures.

• Bihar (4.47%) – Impacted by food price fluctuations.

• Jammu & Kashmir (4.28%) – Increased energy and food prices played a role in inflation persistence.

Major Takeaways from February 2025 CPI Report

• The sharp drop in inflation was primarily led by lower food prices, especially vegetables, pulses, and dairy products.

• The fuel and light sector continued to see deflation, indicating lower energy costs, benefiting households and businesses.

• Gold and silver prices surged, reflecting higher demand for precious metals amid global market uncertainties.

• States like Kerala and Chhattisgarh experienced the highest inflation, highlighting regional disparities in price movements.

Conclusion :

The February 2025 CPI report signals a cooling inflationary environment, with food prices playing a critical role in the overall decline. The moderation in urban and rural inflation, combined with stable energy prices, suggests that inflation remains manageable across most sectors. However, fluctuations in commodity prices and potential global economic shifts will continue to influence future inflation trends.

The next CPI report for March 2025 is scheduled for release on April 14, 2025, providing further insights into whether this downward inflation trend will continue.