India’s Retail Inflation Falls to 1.54% in September 2025, Lowest Since 2017; Food Prices Slide for 4th Month
October 13, 2025
India’s retail inflation eased to 1.54% in September 2025, the lowest since June 2017, driven by falling food prices for the fourth consecutive month. Rural inflation dropped to 1.07%, urban to 2.04%, while RBI forecasts a benign inflation outlook for the rest of FY26.
India’s retail inflation cooled sharply to 1.54% in September 2025, marking the lowest level since June 2017, as food prices continued to decline for the fourth consecutive month, according to data from the Ministry of Statistics and Programme Implementation (MoSPI). The rate dropped 53 basis points from August’s 2.07%, reflecting a broad easing in price pressures across key sectors.
Food Prices Decline for Fourth Consecutive Month
Food prices remained the main driver of the slowdown. The Consumer Food Price Index (CFPI) showed a deflation of 2.28% year-on-year, compared with a 0.64% decline in August. Rural food inflation fell to 2.17%, while urban areas saw a 2.47% contraction. The fall was attributed to a favourable base effect and lower prices of vegetables, edible oils, fruits, pulses, cereals, eggs, and fuel. Notably, vegetable prices fell 21.38% in September, while pulses eased by 15.32%.
Consumer Food Price Index Shows Deflation
Regional trends also highlighted a moderation in overall inflation. Rural headline inflation dropped to 1.07% from 1.69%, and urban inflation eased to 2.04% from 2.47%. Among other categories, housing costs rose to 3.98% from 3.09%, while education inflation edged down to 3.44%. Health costs recorded a slight easing to 4.34%, transport and communication slowed to 1.82%, and fuel and light inflation fell to 1.98%. Core inflation, which excludes food and fuel, climbed to 4.5%, its highest level since September 2023.
Also Read: Retail Inflation Inches Up to 2.07% in August, Stays Within RBI’s Comfort Zone | Republic World
Rural and Urban Food Inflation Trends
The Reserve Bank of India (RBI), in its October bi-monthly monetary policy, revised its inflation projection for 2025-26 downward to 2.6% from 3.1% estimated in August. The central bank cited a healthy south-west monsoon, higher kharif sowing, adequate reservoir levels, and sufficient foodgrain stocks as factors likely to keep food prices benign in the second half of the fiscal year.
September’s reading, slightly above market expectations of 1.50%, contrasts sharply with September 2024, when CPI inflation was 5.49%. The sustained moderation in food and overall prices points to easing cost pressures for consumers, even as core inflation remains elevated.
Food Prices Decline for Fourth Consecutive Month
Food prices remained the main driver of the slowdown. The Consumer Food Price Index (CFPI) showed a deflation of 2.28% year-on-year, compared with a 0.64% decline in August. Rural food inflation fell to 2.17%, while urban areas saw a 2.47% contraction. The fall was attributed to a favourable base effect and lower prices of vegetables, edible oils, fruits, pulses, cereals, eggs, and fuel. Notably, vegetable prices fell 21.38% in September, while pulses eased by 15.32%.
Consumer Food Price Index Shows Deflation
Regional trends also highlighted a moderation in overall inflation. Rural headline inflation dropped to 1.07% from 1.69%, and urban inflation eased to 2.04% from 2.47%. Among other categories, housing costs rose to 3.98% from 3.09%, while education inflation edged down to 3.44%. Health costs recorded a slight easing to 4.34%, transport and communication slowed to 1.82%, and fuel and light inflation fell to 1.98%. Core inflation, which excludes food and fuel, climbed to 4.5%, its highest level since September 2023.
Also Read: Retail Inflation Inches Up to 2.07% in August, Stays Within RBI’s Comfort Zone | Republic World
Rural and Urban Food Inflation Trends
The Reserve Bank of India (RBI), in its October bi-monthly monetary policy, revised its inflation projection for 2025-26 downward to 2.6% from 3.1% estimated in August. The central bank cited a healthy south-west monsoon, higher kharif sowing, adequate reservoir levels, and sufficient foodgrain stocks as factors likely to keep food prices benign in the second half of the fiscal year.
September’s reading, slightly above market expectations of 1.50%, contrasts sharply with September 2024, when CPI inflation was 5.49%. The sustained moderation in food and overall prices points to easing cost pressures for consumers, even as core inflation remains elevated.