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India’s retail inflation rose to 4.45% in July from 4.38% in June, driven by higher food inflation, with onion, ginger and garlic prices seeing sharp increases.
India’s retail inflation rose to 4.45 per cent in July, driven largely by higher food prices. (Photo: PTI)
India’s retail inflation rose to 4.45 per cent in July from 4.38 per cent in June, with higher food prices pushing up overall consumer price pressures, according to government data released on Wednesday.
The Consumer Price Index (CPI)-based retail inflation remained above the Reserve Bank of India’s medium-term target of 4 per cent for the second consecutive month.
The July reading was broadly in line with expectations, with a Reuters poll of economists having projected inflation at 4.50 per cent.
FOOD INFLATION RISES TO 5.52%
Food inflation, measured by the Consumer Food Price Index (CFPI), increased to 5.52 per cent in July from 5.32 per cent in June.
According to data released by the National Statistics Office (NSO), rural food inflation stood at 5.79 per cent, while urban food inflation was lower at 5.05 per cent.
Among individual food items, onion prices saw a sharp acceleration in inflation.
Onion inflation rose to 22.54 per cent in July from 4.73 per cent in June.
Ginger inflation climbed to 83.62 per cent from 50.41 per cent, while garlic inflation increased to 35.36 per cent from 17.93 per cent.
The rise in food prices, however, was partly offset by continued deflation in several vegetables.
Potato prices declined 16.56 per cent year-on-year in July, while lady’s finger and peas recorded deflation of 5.52 per cent and 5.27 per cent, respectively.
Tomato prices fell 4.59 per cent in July, compared with a 31.92 per cent increase in June.
Inflation in the combined food and beverages category stood at 5.24 per cent in July.
Transport inflation was 4.43 per cent, while restaurants and accommodation services recorded inflation of 7.72 per cent.
Housing inflation stood at 2.22 per cent.
Rural inflation remained higher than urban inflation, at 4.84 per cent compared with 3.96 per cent in urban areas.
SILVER JEWELLERY INFLATION CROSSES 100%
Apart from food items, sharp price increases were recorded in select personal goods.
Silver jewellery inflation stood at 109.84 per cent in July, while inflation in gold, diamond and platinum jewellery was recorded at 32.98 per cent.
On a sequential basis, the CPI index for the combined sector increased to 107.94 in July from 107.00 in June.
The July inflation figures are provisional.
The data was compiled using price information collected from 1,407 urban markets, including online markets, and 1,465 villages across States and Union Territories.
The response rate was 100 per cent in both rural and urban markets.
WHAT ECONOMISTS SAY
Reuters reported that economists expect inflationary pressures to remain a concern, particularly as food prices and input costs evolve.
Alexandra Hermann Prasad, lead economist at Oxford Economics, said the latest reading showed that India’s inflation upswing could have further room to run.
She pointed to an erratic monsoon, higher fertiliser costs and increasing pass-through of input costs to consumers as factors that could push prices higher.
“The RBI can afford to be patient for now, but not forever,” Prasad said, adding that mounting evidence of second-round effects and rising medium-term inflation expectations could make the supply shock increasingly difficult for policymakers to ignore.
She expects the RBI to hold rates in October but deliver a 25-basis-point rate hike in December.
Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, said inflation had come in line with expectations.
She said the bank would continue to monitor rainfall, reservoir levels and crude oil prices, along with the pass-through of higher input costs.
“While core inflation remains benign for now, headline inflation is expected to trend higher above 5% from 3QFY27,” Bhardwaj said.
She added that Kotak Mahindra Bank continues to see room for 50 basis points of rate hikes by the Monetary Policy Committee in the second half of FY27.
The RBI, which is mandated to keep CPI inflation at 4 per cent with a tolerance band of 2 per cent on either side, had kept its short-term lending rate unchanged earlier this month, citing the need to assess inflationary pressures.
The central bank had kept the benchmark repo rate unchanged at 5.25 per cent.
About the Author
Vani Mehrotra is the Deputy News Editor at News18.com. She has more than 10 years of experience in national and international news and has previously worked on multiple desks.
August 12, 2026, 4:45 PM IST
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