India’s retail inflation, as measured by the Consumer Price Index (CPI), eased sharply to 1.55 per cent in July 2025 on a year-on-year basis, marking the lowest level since June 2017, according to data released by the Ministry of Statistics and Programme Implementation on Tuesday.
The decline of 55 basis points from June 2025’s headline inflation reflects easing prices across key categories and a favorable base effect.
Food inflation, based on the Consumer Food Price Index (CFPI), dropped further into negative territory at -1.76 per cent in July, compared to -1.01 per cent in June. This marks the lowest level of food inflation since January 2019. The fall is attributed to a broad-based decline in prices of pulses and products, vegetables, cereals, eggs, sugar and confectionery, as well as transport and communication services.
In rural areas, headline inflation fell to 1.18 per cent in July from 1.72 per cent in June, while rural food inflation declined to -1.74 per cent from -0.87 per cent over the same period. Urban inflation also eased, falling to 2.05 per cent in July from 2.56 per cent in June, with urban food inflation slipping further to -1.90 per cent from -1.17 per cent.
Sector-wise, the housing inflation rate stood at 3.17 per cent in July, nearly unchanged from 3.18 per cent in June. Education inflation eased to 4.00 per cent in July from 4.37 per cent a month earlier. Health inflation, however, edged up slightly to 4.57 per cent from 4.38 per cent in June.
A notable decline was recorded in the transport and communication category, where inflation fell sharply to 2.12 per cent in July from 3.90 per cent in June. Fuel and light inflation inched up to 2.67 per cent, compared to 2.55 per cent in the previous month.
The sharp moderation in both headline and food inflation is expected to provide some relief to policymakers and consumers, particularly during a period of global economic uncertainty.
The data reflects continued softening of price pressures in both rural and urban segments, suggesting a favorable inflation outlook in the near term.
ANI
