IRR is a financial metric, used to calculate what returns can one expect from the investment opportunity. It takes into account cash flows throughout the investment and the time value of money. What it means is that the INR 1000 that we hold today is worth more than the INR 1000 that we receive after 3 months taking the inflation into account. Whereas, ROI is the absolute return on investment that doesn’t hold the time value of money into consideration.