Retail inflation in India July 2025: Overview

Retail inflation in India July 2025 slipped to 1.55%, its lowest level in eight years, as fast-moving food costs declined sharply. This provides short-term relief to households while raising questions for policymakers and agrarian stakeholders. ([reuters.com](https://www.reuters.com/world/india/indias-retail-inflation-slows-8-year-low-155-july-2025-08-12/?utm_source=chatgpt.com), [economictimes.indiatimes.com](https://economictimes.indiatimes.com/news/economy/indicators/retail-inflation-eases-to-over-8-year-low-at-1-55-in-july-aided-by-cooling-food-prices/articleshow/123256183.cms?utm_source=chatgpt.com))

Food deflation & key drivers

The key drag on inflation was food deflation, led by substantial drops in prices of vegetables (around 20.7%) and pulses (~13.8%). This was driven by increased supply from recent harvests and softer demand in urban markets. ([economictimes.indiatimes.com](https://economictimes.indiatimes.com/news/economy/indicators/retail-inflation-eases-to-over-8-year-low-at-1-55-in-july-aided-by-cooling-food-prices/articleshow/123256183.cms?utm_source=chatgpt.com))

Additional factors include imports easing pressure on domestic markets and good monsoon conditions aiding overall supply stability.

Retail inflation in India July 2025: Rural vs urban

Urban CPI dipped from 2.56% to around 2.05%, while rural CPI more sharply fell from 1.72% to 1.18%. Food deflation was visible across both segments (rural ~ –1.74%, urban ~ –1.90%), reflecting widespread relief. Yet, service and energy prices kept urban CPI elevated. ([economictimes.indiatimes.com](https://economictimes.indiatimes.com/news/economy/indicators/retail-inflation-eases-to-over-8-year-low-at-1-55-in-july-aided-by-cooling-food-prices/articleshow/123256183.cms?utm_source=chatgpt.com))

State-level outliers

Kerala remained an outlier with a much higher CPI (~8.89%), followed by Punjab (~3.53%), signalling sharp state-level divergence driven by local tax structures and supply conditions. ([timesofindia.indiatimes.com](https://timesofindia.indiatimes.com/city/chandigarh/punjab-logs-3-53-inflation-more-than-double-national-average/articleshow/123260412.cms?utm_source=chatgpt.com))

Micro savings calculator

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Based on –1.76% food inflation

What this means — consumers, farmers and policy

• Consumers get immediate relief—grocery bills dip, improving real income.
• Farmers & producers face margin pressures if retail deflation outpaces farm-gate prices.
• Policy outlook: With CPI well below RBI’s 2–6% target, rate hikes unlikely; RBI may ease cautiously if the trend continues—but core inflation remains a watch factor. ([reuters.com](https://www.reuters.com/world/india/indias-retail-inflation-slows-8-year-low-155-july-2025-08-12/?utm_source=chatgpt.com))

Quick data table

Provisional data—refer to official releases for updates.

Sources & further reading

• Reuters: India’s annual retail inflation slows to 1.55% in July.
• Economic Times report
• TOI: State inflation disparities
• RBI
• MOSPI

Disclaimer: All figures are provisional and based on August 2025 data.