FX.co ★ Indian Inflation Falls to Over 5-Year Low

India's annual inflation rate decreased to 3.34% in March 2025, down from 3.61% in February, defying market forecasts that expected the rate to hold steady. This marks the fifth consecutive decrease, reaching the lowest levels seen since August 2019. The reduction further positioned the inflation rate below the Reserve Bank of India's target midpoint of 4%. Food inflation, which comprises nearly half the weight of India’s consumer price index, plunged to a near four-year low at 2.69%, compared to 3.75% in February. This decline was driven by deflationary trends in items such as eggs, spices, vegetables, and pulses, which outweighed a rebound in fuel and light prices (up to 1.48% from -1.33%) and an acceleration in housing inflation (up to 3.03% from 2.91%). On a month-to-month basis, consumer prices fell by 0.26%, marking a fifth consecutive monthly decrease.