India's retail inflation fell below 4% in February for the first time in six months mainly due to a decline in vegetable prices, giving the central bank room to cut rates further in coming meetings. Annual retail inflation in February eased to 3.

Headline inflation in rural India dropped to 3.79 per cent in February compared to 4.59 per cent in January. Headline inflation in urban India also fell to 3.32 per cent from 3.87 per cent.

A sharp decline in headline and food inflation in the rural sector was also observed in February to 3.79 per cent from 4.59 per cent a month earlier.