India's retail inflation eased to a five-month low of 4.31% in January from 5.22% in December as food price inflation declined, government data released on Wednesday showed.

This could clear the way for another rate cut by the Reserve Bank of India, which slashed rates from 6.5% to 6.25% after its monetary policy meeting on Feb. 7.

India's retail inflation slowed to a five-month low in January as food price inflation eased, boosting the odds of another rate cut in the South Asian economy where growth is slowing amid the escalating threat of a global trade war.

The Indian government has been steadily lowering its full-year real GDP forecasts, after the economic growth missed expectations by a large margin in the quarter ended September, when its grew by 5.4% — its slowest expansion in nearly two years.

Supported by softening food prices, India's retail inflation, measured by the Consumer Price Index (CPI), eased to 4.31% in January 2025, down from 5.22% in December 2024, according to data released by the Ministry of Statistics and Programme Implementation on Tuesday.

The top five items showing the highest year on year Inflation at the All India level in January are coconut oil (54.20 per cent), potato (49.61 per cent), coconut (38.71 per cent), garlic (30.65 per cent),