Inflation falls, but don’t lower the guard

INDIA’s retail inflation, as measured by the Consumer Price Index (CPI), dropped sharply to 2.82 per cent in May 2025. This is its lowest level in over six years. The dramatic cooling, primarily driven by easing food prices, is a welcome reprieve for consumers, especially those in the lower income brackets who spend a large share of their budgets on food. The sharp contraction in prices of vegetables (–13.7 per cent), pulses (–8.2 per cent), spices and meat has been central to this trend. Food and beverages inflation dropped to 1.5 per cent, marking the seventh consecutive month of moderation. However, this relief is partial. Inflation in edible oils surged into double digits, driven by global price trends, reduced oilseed sowing and India’s heavy dependence on imports. Fruits, too, saw price spikes. The government’s move to halve the import duty on crude edible oils is a timely measure, but its impact will take time to reflect.