Retail inflation in September slips to 1.54%: Govt data

Retail inflation fell to a 99-month low of 1.54% in September 2025 on falling food and fuel prices, official data showed. This is once again below the Reserve Bank of India’s lower comfort bound of 2%. 

Inflation as measured by the Consumer Price Index, released by the Ministry of Statistics and Programme Implementation, was last lower in June 2017 when it stood at 1.46%. Inflation had fallen below the RBI’s lower comfort limit in July 2025, before rising marginally to 2.1% in August.

Within the index, the food and beverages grouping saw a contraction of 1.4% in September 2025, compared with a growth of 0.05% in August 2025, and 8.4% inflation in September last year.

“Looking ahead, food inflation is likely to stay benign supported by a favourable base and good monsoon,” Rajani Sinha, Chief Economist at CareEdge Ratings said. “That said, risks remain from the late withdrawal of the monsoon and heavy rains in certain regions, which could risk crop damage.” 

In addition, Ms. Sinha said that persistently high double-digit inflation in edible oils warrants close monitoring, given weak sowing trends, import dependence, and elevated global edible oil prices. 

Inflation in the oil and fats category came in at 18.3% in September 2025, the 11th consecutive month of double-digit inflation in the sub-grouping.

Inflation in the fuel and light category came in at 1.98% in September 2025, down from 2.3% in August. Save for one month, inflation in this category has been easing since April. 

“The moderation in food and fuel prices has provided much-needed relief to households and improved purchasing power,” Rajeev Juneja, President of the PHDCCI said. 

Inflation in the clothing and footwear category came in at 2.28% in September, marginally lower than the 2.33% seen in August 2025 and the 2.7% in September last year. This is the fifth consecutive month of slowing inflation in this category.

Inflation in the pan, tobacco and other intoxicants category, however, quickened in September 2025 — to 2.7% from 2.5% in August. Similarly, the housing sector also saw inflation quickening, to 4% in September from 3.1% in the previous month.

Economists say that the low inflation figures, with the RBI’s Monetary Policy Committee revising downwards its inflation forecast for the year for the fourth time in a row during its most recent monetary policy meeting, raises hopes of a rate cut in the next meeting in December.