India’s retail inflation, measured by the Consumer Price Index, fell to 3.8% in March 2026—its lowest reading since September 2019—driven by a sharp easing in food prices, particularly vegetables, pulses, and edible oils, according to data released by the Ministry of Statistics and Programme Implementation on Friday.
The March print was significantly below the 4.3% recorded in February and the 4.9% average for the second half of 2025. Core inflation—which excludes food and fuel—also moderated to 3.5%, signalling that underlying price pressures remain well contained.
Vegetable prices declined 11.2% month-on-month, with tomatoes, onions, and potatoes all showing sharp corrections after seasonal supply improved. Pulses inflation, which had been a persistent pain point, eased to 4.1% from 7.8% a year ago following strong domestic production and government interventions to increase buffer stocks.
Fuel and light inflation was flat at 3.3%, reflecting broadly stable global crude oil prices and unchanged domestic retail fuel prices. Housing inflation remained sticky at 4.7%, reflecting robust urban rental demand.
The benign inflation reading strengthens the case for a rate cut at the RBI’s June meeting. ‘At 3.8%, inflation is now at a level where maintaining an unchanged policy rate implies passive tightening of real rates. The RBI has room to ease,’ said Sonal Varma, Chief India Economist at Nomura.
The government also noted that the headline figure validates the effectiveness of its supply-side interventions, including releasing buffer stocks of pulses, imposing export restrictions on certain commodities during price spikes, and enhancing warehouse capacity under the PM Gati Shakti network.
