Retail inflation in India eased sharply to 1.55% in July 2025, hitting its lowest level since July 2017, according to provisional government data. The figure marks a steep fall of 55 basis points from June’s 2.10%, driven largely by favourable base effects and a drop in prices of essential goods.
Food inflation recorded an even sharper decline, slipping into deflation at -1.76% in July — the lowest since January 2019. Both rural and urban areas experienced this deflationary trend, with rural food inflation at -1.74% and urban at -1.90%.
The fall in overall inflation is attributed to price drops in key categories such as pulses, vegetables, cereals, transport and communication, education, eggs, and sugar and confectionery. Rural headline inflation eased to 1.18% in July from 1.72% in June, while urban inflation fell from 2.56% to 2.05%.
In other sectors, housing inflation stayed steady at around 3.17%, education inflation eased to 4.00%, and health inflation rose marginally to 4.57%. Transport and communication inflation dropped to 2.12%, while fuel and light inflation inched up to 2.67%.
