ET analysis showed that vegetables alone contributed 43.7% to the food inflatable baskets in FY25, up from 30.8% in FY24, while the share of fruit rose from 5.1% to 8.3%.
Their high contribution means that food inflation in FY255 dropped slightly to 7.3% from 7.5% in FY24, even though the overall inflation rate dropped more during that period – from 5.4% to 4.6%.
“Climate change has affected supply in FY25 due to instability in rainfall patterns, especially for vegetables and fruits,” said Paras Jasrai, deputy director of India Ratings and Research (IND-RA).
Madan Sabnavis, chief economist at the Bank of Baroda, pointed out that fruits and vegetables are sensitive to adverse weather conditions such as extreme heat and heavy rain.
Vegetable inflation averaged 19.4% in FY25, compared with 14.9% in FY24. Among vegetables, garlic has the highest inflation rate in FY25, followed by potato (53.3%), onion (37.4%) and lemon (21.2%). Tomato inflation rate is 18.8%. The highest growth in coconut fruit was 21.4%, followed by pineapple (13.5%), guava (13.3%) and green coconut (12.2%).
Sabnavis noted that transportation costs also increased the last fiscal and increased inflation, “not due to fuel prices, but due to the overall logistics costs.”
Cereals and products were the second largest contributor to 23.7% of food inflation in FY235, although that was down from 33.3% in FY24.
Of the 10 subgroups of the Consumer Price Food Index, 6 recorded their contribution decline.
It is worth noting that the contribution of spices fell from 18.4% in FY24 to -3.6% in FY25. Milk ranged from 14.4% to 6.4%; pulsed from 12% to 7.2%.
In contrast, oil and fat see a rebound. Despite the deflation trend, their contribution rose to 5.9% in FY255 in -19.8%.
Sabnavis attributes it to international price trends and rupee depreciation. “Global edible oil prices have risen, and depreciation of 4-5% of the rupee has also played a role,” he said.
Inflation of edible oils rose to 2.5% from -14.8% in fiscal 24.
Benefits of prospects
Jasrai expects that as global commodity prices drop, the situation will improve, which will gradually affect the overall oil and fat conditions in FY26.
Last week, the Indian Meteorological Department (IMD) predicted higher monsoon rainfall than normal monsoon rainfall in 2025, a positive signal from the agricultural sector. “With a high foundation and favorable monsoon forecast for FY25, we expect food inflation to be alleviated in FY26,” Jasrai said.
