As per the data released by National Statistics Office (NSO), the consumer price index (CPI) based inflation stood at 1.55 per cent in July, mainly due to subdued prices of food items.
New Delhi: India’s headline retail inflation dropped sharply to an eight-year low of 1.55 per cent in July 2025, down 55 basis points from June’s 2.10 per cent, marking its lowest level since June 2017. The significant drop was primarily driven by a steep fall in the prices of food items, including vegetables and cereals, the government said on Tuesday.
As per the data released by National Statistics Office (NSO), the consumer price index (CPI) based inflation stood at 1.55 per cent in July, mainly due to subdued prices of food items. “The CPI-based inflation was 2.1 per cent in June and 3.6 per cent in July 2024, while the July 2025 inflation is the lowest since June 2017 when it was at 1.46 per cent,” the NSO data said.
The moderation in retail inflation extends a six-month streak of sub-4 percent inflation, with the average since April holding below 3 percent. “The significant decline in headline inflation and food inflation during the month of July 2025 is mainly attributed to favourable base effect and to decline in inflation of pulses and products, transport and communication, vegetables, cereal and products, education, egg and sugar and confectionery,” it said.
As per the data, food inflation remained in negative territory for the second straight month, with the index recording a deeper deflation of 1.8 percent compared with -1.1 percent in June. “Vegetable prices shrank 20.7 percent from the previous year, while pulses were down 14 percent,” the data showed.
“Similarly, meat and fish inflation also continued their negative streak for a fourth consecutive month. Besides, rural inflation stood at 1.18 percent in July, down from 1.72 percent in June, while urban inflation eased to 2.05 percent from 2.56 percent in the same period,” it showed.
Commenting on the NSO data, Icra’s chief economist Aditi Nayar said that the CPI inflation was dampened by the continued YoY decline in food prices on an elevated base, even as vegetable prices displayed a surprising uptick. “Icra expects kharif sowing in the entire season is set to exceed last year's level by a reasonable margin,” Nayar said.
“Cumulative kharif sowing at the end of the ongoing season can meet last year's level (110.9 million hectare), even if incremental sowing contracts by 20 per cent YoY in the remainder of the season. Nevertheless, the spatial and temporal distribution of rainfall remains key, including a timely withdrawal of the rains to allow for well-timed harvesting,” she added.
