India’s headline CPI inflation fell to 1.54% in September 2025, the lowest year-on-year pace since June 2017, led by a sharper fall in food prices with CFPI at -2.28% on the back of declines in vegetables, oils, fruits, pulses, cereals, eggs, and fuel and light categories. Rural inflation cooled to 1.07% and urban to 2.04%, while housing (urban-only) quickened to 3.98% and health stayed elevated at 4.34%.
India’s Inflation hits eight-year low as food costs slide
India’s retail inflation decelerated to 1.54% in September 2025, marking the softest print since June 2017 as food prices fell more deeply into negative territory, easing household budget pressures ahead of the festive season. The Ministry of Statistics and Programme Implementation (MoSPI) attributed the moderation to a favorable base and broad-based declines in key food items, noting the data is provisional for September. As mentioned in the MoSPI press release, the Consumer Food Price Index declined by 2.28% year-on-year, with rural CFPI at -2.17% and urban at -2.47%.
- Headline CPI fell by 53 basis points from August’s 2.07% to 1.54% in September, while food inflation dropped by 164 basis points month-on-month to its lowest since December 2018. The slide was led by vegetables, oils and fats, fruits, pulses and products, cereals and products, eggs, and fuel and light, pointing to widespread easing across the consumption basket.
- Rural inflation cooled to 1.07% from 1.69%, and urban inflation eased to 2.04% from 2.47%, reflecting a synchronized moderation across geographies; on a monthly basis, the combined CPI index edged up 0.10% while the food index dipped 0.49%.
- Core services showed mixed traction: housing inflation (urban-only) accelerated to 3.98% from 3.09%, health stayed firm at 4.34%, transport and communication eased to 1.82%, and fuel and light softened to 1.98%. Among states with populations over 50 lakhs, Kerala recorded the highest combined inflation at 9.05%, followed by Jammu & Kashmir (4.38%), Karnataka (3.33%), Punjab (3.06%), and Tamil Nadu (2.77%).
- Item-level trends highlight deep corrections: vegetables fell about 21% year-on-year on a combined basis, onions dropped nearly 50%, potatoes by about 37%, and pulses declined roughly 15%, while edible oils remained sharply higher year-on-year and precious metals like gold and silver saw strong gains, underscoring divergent commodity dynamics within the CPI basket.
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With headline inflation at an eight-year low and food prices firmly negative, near-term inflation risks appear contained even as select services like housing and health remain elevated relative to the headline pace. The next CPI release, due November 12, will clarify whether the disinflation trend can persist once base effects fade and seasonal demand normalizes post-festivals.
