India Marks Lowest Level in Inflation Rate in the Past Six Years

India’s recorded total inflation rate of 3.16 percent is said to be the lowest recorded inflation in the past six years. This is the straight sixth month that inflation has fallen. The prior lowest reading was recorded in the month of March, with a total interest rate of 3.34 percent.

The newly recorded inflation rate of 3.16 percent is lower than the expected inflation rate of 3.27 percent by Reuters. The key inflation in the metric of the country, food inflation, dropped to 1.78 percent in April, compared to 2.69 percent from March’s record of food inflation rate. Therefore, the food inflation may remain stagnant for some time.

The inflation figure for the Reserve Bank of India (RBI) may clear the way for cut rates. RBI will be shifting its stance to accommodative from neutral. This change in stance is to stimulate the economy through softer interest rates. Governor of RBI, Sanjay Malhotra in a statement released on “Going forward too, considering the evolving growth-inflation trajectories, monetary policy needs to be accommodative.” The most recent meeting by RBI, concluded with a cutoff in policy rate to 6 percent.

The Bank of America has expected the GDP growth to recover up to 6.7 percent when compared to the GDP of December's ending quarters of 6.2 percent. But, RBI has estimated a rate of 6.5 percent full year GDP. HSBC has previously highlighted that reciprocal tariff can directly shave off 0.5 percentage point from India’s full-year growth for FY26 March ending.

But the core inflation rate is expected to rise due to higher gold prices. The rise in the gold has also contributed to the tensions in the global market.