Record Low Inflation in September
Retail Inflation Hits 8-Year Low in September 2025: India’s retail inflation dropped to 1.54% in September 2025, marking an 8-year low since June 2017. The data released by the Ministry of Statistics and Programme Implementation (MoSPI) highlights a sharp decline from 2.07% in August 2025. This fall is largely driven by continued deflation in food prices and a favorable base effect from the previous year.
Static GK fact: The Consumer Price Index (CPI) measures changes in the price level of a basket of consumer goods and services. It serves as India’s official retail inflation indicator.
Urban and Rural Trends
The inflation slowdown was broad-based across regions, though the rural-urban gap remained visible. Rural inflation was recorded at 1.07%, reflecting deeper price corrections in food and daily-use items. Urban inflation, at 2.04%, was slightly higher due to higher service costs and fuel-related expenses.
Static GK Tip: Rural inflation is often influenced by agricultural output and monsoon performance, while urban inflation is impacted by transportation, rent, and service prices.
Food Prices Continue in Deflation
Food inflation remained negative for the fourth straight month, driving the overall CPI downward. The All-India Consumer Food Price Index (CFPI) showed a deflation of –2.28%, the lowest since December 2018.
Rural areas reported –2.17%, and urban areas –2.47% in food deflation, mainly due to falling prices of vegetables, pulses, cereals, edible oils, and fruits. This pattern signals a strong supply-side recovery and a balanced food supply chain.
Static GK fact: India’s food inflation forms nearly 46% weightage in the CPI basket, making it a key driver of overall retail inflation.
Key Drivers Behind the Decline
The decline in inflation is attributed to two critical factors:
- Favorable Base Effect – The higher inflation in September 2024 created a statistical base that made the current numbers appear subdued.
- Sharp Drop in Essential Prices – Strong crop output, controlled logistics costs, and effective government monitoring have led to sustained price reductions in essentials.
The Reserve Bank of India (RBI), which targets 4% CPI inflation (±2%), is expected to maintain an accommodative monetary stance as long as inflation remains well below the midpoint target.
Static GK Tip: The Monetary Policy Committee (MPC), constituted under the RBI Act 1934 (Amendment 2016), decides India’s inflation target and repo rate to maintain price stability.
Economic Implications
Low inflation supports household purchasing power and may encourage consumer spending. However, prolonged deflation in food prices can hurt farmers’ incomes and dampen rural demand. Policymakers must balance inflation control with agricultural income stability to maintain sustainable growth.
Static GK fact: The base year for India’s CPI is 2012, with 2012 = 100 as the reference index value.
Static Usthadian Current Affairs Table
Retail Inflation Hits 8-Year Low in September 2025:
| Topic | Detail |
| Retail Inflation (Sept 2025) | 1.54% (lowest since June 2017) |
| Previous Month Inflation | 2.07% (August 2025) |
| Rural Inflation | 1.07% |
| Urban Inflation | 2.04% |
| Food Inflation (All-India) | –2.28% (lowest since December 2018) |
| CPI Base Year | 2012 |
| RBI Inflation Target | 4% ± 2% |
| Main Driver of Decline | Food deflation and base effect |
| Ministry Reporting Data | Ministry of Statistics and Programme Implementation |
| MPC Establishment | RBI Act (Amendment) 2016 |
