The Economic Survey 2024-25 highlights that while overall inflation in India has eased, food prices remain elevated. Retail inflation, measured by the Consumer Price Index (CPI), dropped from 5.4% in FY24 to 4.9% in FY25 (April-December). This decline was driven by a 0.9 percentage point fall in core inflation (excluding food and fuel).
Globally, food prices have softened due to improved supply conditions, but emerging economies like India, China, and Brazil have witnessed rising food inflation. The survey warns of potential price volatility due to geopolitical tensions, including conflicts in the Middle East and Ukraine.
India’s food inflation, measured by the Consumer Food Price Index (CFPI), rose from 7.5% in FY24 to 8.4% in FY25, driven by higher vegetable and pulse prices. These two categories, though accounting for just 8.42% of the CPI basket, contributed 32.3% to overall inflation. Weather-related disruptions and supply chain issues further exacerbated price pressures.
The survey expects food inflation to ease slightly in the January-March quarter with the arrival of the Kharif harvest and falling vegetable prices. However, risks remain from potential spikes in global agricultural prices and adverse weather conditions. It also cautions that while global energy prices have softened, economic uncertainties could still impact inflation trends.
