India's retail inflation remained below the central bank's 4% target for the third consecutive month as food prices rose at a slower pace, opening up room for more interest rate cuts to support growth in the world's fifth-largest economy.

India's retail inflation has moderated to 3.16% in April, down from 3.34% in March, according to official data released by the Ministry of Statistics and Programme Implementation on Tuesday. This is the lowest year-on-year inflation since July 2019.

Food inflation dropped to 1.78 per cent in April, down from 2.69 per cent in March and a sharp fall compared to 8.7 per cent in the same month last year.