India Retail Inflation at 8-Year Low of 1.55% in July 2025

India’s Retail Inflation Drops to 8-Year Low in July 2025

As per the Consumer Price Index India (CPI) data published by the Ministry of Statistics and Programmed Implementation, retail inflation in India in July 2025 declined to 1.55%. This is the lowest inflation noted in India since June 2017 at 1.46% and is also well below the RBI inflation target comfort zone.

The drop of 55 basis points from June’s inflation rate was mainly due to easing prices across key categories and a favourable base effect. Food price inflation in India, measured by the Consumer Food Price Index, fell further into negative territory at -1.76% in July, compared to -1.01% in June. This is the lowest level since January 2019, driven by a significant vegetable price fall in India along with declines in pulses, cereals, eggs, sugar, and confectionery prices.

Rural inflation in India decreased to 1.18% in July from 1.72% in June, and rural food inflation also fell, falling to -1.74% in July (it was -0.87% in June). Urban inflation in India also eased, falling to 2.05% in July from 2.56% in June and urban food inflation fell further to -1.90% in July from -1.17% in June.

By heading, housing inflation stood at 3.17% (unchanged from June’s 3.18%) and education fell from 4.37% to 4.00% and health increased slightly from 4.38% to 4.57% inflation. The transport and communication category fell sharply from 3.90% in June to 2.12% (June 2023). Fuel and light inflation increased slightly from 2.55% to 2.67%.

The notable moderation seen in both headline inflation and food inflation should lead to some relief for consumers and also help bolster the RBI Monetary Policy Committee’s (MPC) assessment at this point in time since they are of a positive view. That the price pressures noted have relaxed in both rural and urban settings is further evidence that inflation is evolving favorably in the near terms.