Retail inflation eases to 8-year low of 1.55% in July, decrease than RBIs consolation band

Retail inflation in India slipped to 1.55% in July 2025, the bottom since June 2017, and beneath the Reserve Bank of India’s consolation band of 2-6%, primarily led by a contraction in meals costs.

The Consumer Price Index (CPI), launched by the Ministry of Statistics and Programme Implementation on Tuesday (August 12, 2025), confirmed inflation in India has been easing for 9 consecutive months.

The charge of inflation within the meals and drinks class got here in at -0.8% in July 2025, decrease than -0.2% in June and 5.1% in July 2024. 

“In the meals basket, there was deflation in key objects akin to greens, pulses, spices, and meat,” Rajani Sinha, Chief Economist at CareEdge Ratings mentioned. “Looking forward, meals inflation is more likely to stay contained, supported by wholesome agricultural exercise and a beneficial base.” 

Vegetable and pulses costs contracted 21% and 14% respectively, pushed by a excessive base and falling costs.

Ms. Sinha added {that a} good progress of the monsoon, ample reservoir ranges, and robust kharif sowing bode effectively for agricultural output and meals value stability. 

Core inflation, which excludes the affect of meals and gasoline costs, additionally eased to 4.1% in July 2025 from 4.4% within the earlier month, practically on the RBI’s goal of 4%. 

The different broad classes within the CPI noticed inflation remaining practically the identical in July as in June. The pan, tobacco and intoxicants class noticed inflation stay flat at 2.4% in July. Similarly, the clothes and footwear class noticed inflation ease marginally to 2.5% in July from 2.5% in June.

Inflation within the housing phase remained at 3.2% in July, whereas that within the gasoline and light-weight class quickened to 2.7% in July from 2.5% in June. 

Dipanwita Mazumdar, Economist on the Bank of Baroda, mentioned {that a} statistical excessive base will hold the inflation charge down in September-December 2025. 

“The present cycle is appearing in favour of us when the inflationary affect from tariffs is the centre level of worldwide discussions,” she mentioned in a word. “We count on the draw back danger to world development will largely hold worldwide commodity costs in examine. This is predicted to partially negate the upper tariff charges in place.” 

However, she additionally added that India must be watchful in case it has to utterly cease shopping for Russian oil in accordance with U.S. President Donald Trump’s calls for. 

“In this case, some diversification in the direction of Kuwait and Iraq would additionally lend assist,” she mentioned.