Why Is Kerala’s Inflation Still High in April 2025 While India Sees a Cooldown?
- Remin Francis I R
- May 14
- 3 min read
Updated: Jun 16
India's inflation cooled to a six-year low of 3.16% in April 2025, driven by a sharp drop in food prices. However, Kerala bucked the trend, recording the highest inflation among major states at 5.94%, mainly due to rural price pressures.
India’s inflation cooled significantly in April 2025, offering much-needed relief to consumers and policymakers alike. The headline Consumer Price Index (CPI) stood at 3.16% year-on-year, down from 3.34% in March. This marks the lowest inflation rate since July 2019, signalling continued price stability across the country.
Food Inflation Hits Lowest in Over 3 Years
A key driver behind this moderation was the steep drop in food inflation, which fell to 1.78% in April, from 2.69% a month earlier. This is the lowest food inflation rate since October 2021. Prices of essential food items such as vegetables, pulses, fruits, and cereals saw notable declines. In rural areas, food inflation was at 1.85%, while urban India recorded 1.64%. Month-on-month, food prices dipped by 0.15%, indicating mild deflationary pressure in key food categories.
Mixed Trends in Other Inflation Categories
While food prices fell, some categories saw mild increases. Transport and communication inflation rose to 3.73% (from 3.36%), and fuel and light inflation jumped to 2.92%- a significant increase from 1.42% in March. On the other hand, housing, health, and education inflation remained largely stable.
Kerala Reports the Highest Inflation Among Major States
Kerala stood out in April 2025 by recording the highest year-on-year inflation among major states at 5.94%, defying the broader national trend of easing prices. Rural areas in Kerala were particularly affected, with inflation climbing to 6.46%, compared to 4.91% in urban regions, indicating potential localised supply-side constraints or structural cost challenges. Other states with elevated inflation included Karnataka (4.26%), Jammu & Kashmir (4.25%), Punjab (4.09%), and Uttarakhand (3.81%).
In 2023, different parts of Kerala saw different levels of price rise, or inflation. Among them, Kozhikode had the highest inflation at 5.73%, followed by Kasargod at 5.61% and Chalakkudy at 5.45%. On the other hand, Punalur saw the lowest inflation rate. These differences show that prices don’t rise the same way everywhere, and local factors like transport, demand, and availability of goods play an important role.
Key Factors Driving Inflation in the State
One major reason for higher prices in some areas is problems in the supply chain. In many rural or remote places, it’s harder and more expensive to transport goods. These extra costs often get added to the final price that customers pay. Additionally, when local farming faces challenges, such as adverse weather conditions or poor harvests, there aren’t always sufficient options to obtain food from elsewhere. So, prices in those areas go up more quickly.
Another important point is the higher wage rates in Kerala. Because of strong trade unions, better working conditions, and government support, both men and women doing unskilled work earn more than workers in most other states. This is good for workers, but it also means businesses have to spend more to produce goods and services. In the end, these higher costs are passed on to customers through higher prices.
Kerala is also a consumer-focused state, meaning people here buy a lot of goods. When demand is high and supply doesn’t keep up, some private sellers may take advantage by increasing prices, especially for essential items. On top of that, Kerala depends a lot on other states for many basic goods. So, if prices rise in other parts of India, Kerala feels the impact very quickly.
Conclusion
With CPI inflation well below the RBI’s comfort zone, the latest figures point toward price stability for most of India. However, fuel costs and regional disparities, like those in Kerala, highlight the need for continued monitoring and targeted interventions.
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