🧾 Headline Inflation Falls Sharply in March

• India’s retail inflation dropped to 3.34% in March (from 3.61% in February)

• This is the lowest inflation reading in 67 months

• It’s the second straight month inflation has stayed below the RBI’s 4% target

💡 What This Means for RBI and Interest Rates

• Economists now expect a possible rate cut in June

• RBI has already cut rates twice in 2025, bringing the policy rate down to 6%

• RBI revised its inflation forecast for FY26 to 4% (down from 4.2%)

• Q1 inflation projection cut to 3.6% (from 4.5%)

• Q2 estimate lowered to 3.9% (from 4%)

🍽️ Food Prices Keep Falling

• Food inflation dropped to 2.69% (lowest in 40 months)

• Key deflationary drivers:

  • Vegetables: -7.04%

  • Eggs: -3.16%

  • Pulses: -2.73%

• But:

  • Fruits and edible oils inflation remained above 10% for the third straight month

🏠 Core Inflation Creeps Up

• Core inflation rose to 4.1%, driven by:

  • Housing

  • Transportation

  • Education

  • Health

• Miscellaneous inflation rose to 4.99% in March (from 4.84%)

🔌 Fuel & Light Inflation Returns After 18 Months

• Fuel prices rose 1.46%, ending a long deflationary streak

• But economists expect this may not last due to cuts in electricity prices

📊 What Experts Are Saying

• RBI’s shift to an accommodative stance validated

• Further rate cuts possible—up to 50 bps in FY26

• But: Commerce policy risks and global tensions remain a concern