The latest government figures, released on Monday, October 13, 2025, bring welcome news: India’s retail inflation significantly eased to 1.54% in September. This marks a notable decrease from 2.07% recorded just the month before, largely driven by a welcome drop in the prices of essential food items, particularly vegetables and pulses.
For context, the consumer price index (CPI)-based inflation stood at 5.49% in September 2024.
The National Statistics Office (NSO) explained that this positive shift in “headline inflation” and “food inflation” in September 2025 is primarily due to a favorable base effect, alongside falling prices across various categories including vegetables, oils and fats, fruits, pulses, cereals, eggs, and even fuel and light.
Specifically, year-on-year food inflation for September 2025 was recorded at (-) 2.28%. This is a significant improvement compared to (-) 0.64% in August of the same year, and a stark contrast to the 9.24% food inflation observed in September of the previous year.
Reflecting this positive trend, the Reserve Bank of India (RBI) revised its inflation forecast downwards in its October bi-monthly monetary policy. The projection for 2025-26 is now 2.6%, a decrease from the 3.1% estimate made in August.
Looking ahead to the second half of the fiscal year, the RBI anticipates continued stable food prices. This optimism is based on several key factors: robust progress of the south-west monsoon, increased kharif crop sowing, healthy reservoir water levels, and ample buffer stocks of foodgrains.