India’s retail inflation, measured by the Consumer Price Index (CPI), dropped sharply to 1.55% in July 2025 — the lowest since June 2017 — according to data from the Ministry of Statistics and Programme Implementation, ANI reported on August 12. The reading is 55 basis points lower than June’s 2.10%, driven by easing prices across key categories and a favourable base effect.

Food inflation, tracked by the Consumer Food Price Index (CFPI), fell deeper into negative territory at -1.76% in July, compared with -1.01% a month earlier, marking the lowest since January 2019. The decline was broad-based, with prices of pulses and products, vegetables, cereals, eggs, sugar and confectionery, as well as transport and communication services, all easing.

In rural areas, headline inflation slid to 1.18% from 1.72% in June, while rural food inflation fell to -1.74% from -0.87%. Urban inflation also moderated, at 2.05% in July compared with 2.56% in June, with urban food inflation dropping to -1.90% from -1.17%, ANI reported.

Among key sectors, housing inflation was stable at 3.17% in July versus 3.18% in June, while education inflation eased to 4.00% from 4.37%. Health inflation ticked up to 4.57% from 4.38%. Transport and communication saw a notable decline, with inflation falling to 2.12% from 3.90%. Fuel and light inflation edged higher to 2.67% from 2.55%.

The continued softening in both headline and food inflation is expected to ease pressure on policymakers and provide relief to consumers amid global economic uncertainty. The data suggests price pressures are moderating across rural and urban segments, pointing to a favourable inflation trajectory in the near term.