Retail inflation in September slips to 1.54%, hits 8 year low

India’s retail inflation eased sharply to an eight-year low of 1.54% in September 2025, slipping below the Reserve Bank of India’s (RBI) lower tolerance band of 2–6%, driven by a sustained decline in food prices. This is the lowest inflation reading since June 2017, according to data released by the National Statistics Office (NSO) on Monday.The Consumer Price Index (CPI)-based inflation fell from 2.07% in August and was significantly lower than the 5.49% recorded in September 2024, reflecting a broad-based moderation across food and non-food categories.
The NSO attributed the decline to a favourable base effect and easing inflation in key food items such as vegetables, pulses, fruits, cereals, edible oils, and eggs. Year-on-year food inflation came in at (-) 2.28% in September 2025, compared to (-) 0.64% in August and a sharp 9.24% a year ago.“The decline in headline inflation and food inflation during September 2025 is mainly attributed to the favourable base effect and decline in inflation of vegetables, oil and fats, fruits, pulses and products, cereal and products, egg, fuel and light,” the NSO said in its statement.
The latest data suggests that softening food and fuel prices, coupled with easing global commodity pressures, have brought welcome relief to consumers and policymakers alike. The steep moderation could also reinforce expectations of a dovish stance from the RBI in upcoming policy reviews,according to experts.In its October bi-monthly monetary policy, the RBI had already revised its inflation forecast for FY2025–26 downward to 2.6%, compared to 3.1% projected in August, citing better crop conditions and improved supply chains.The central bank noted that the healthy progress of the southwest monsoon, higher kharif sowing, adequate reservoir levels, and comfortable buffer stocks of food grains are likely to keep food prices stable in the coming months.Economists believe that while the current data points to strong disinflationary trends, the RBI may closely monitor global energy prices and potential supply disruptions before signaling any major policy shifts.

(Business Correspondent)