The Consumer Price Index drops to 1.55% as food prices fall sharply into negative territory. This is good news for families and policymakers in a time of global uncertainty.
New Delhi, August 13, 2025: In an amazing turn of events, India’s retail inflation has dropped to its lowest level in more than eight years. This is a huge relief for families who have been dealing with growing costs in recent years.
The Ministry of Statistics and Program Implementation has released new information that indicates the Consumer Price Index (CPI) fell to 1.55% in July 2025, down from 2.10% in June and the lowest level since June 2017. Analysts say that falling prices for basic items and a good base effect are the two main reasons for this big drop in activity.
Food prices going up, though, have really changed the game. The Consumer Food Price Index (CFPI) shows that food prices fell even more in July, down -1.76% from June’s -1.01%, the biggest drop since January 2019. The decline includes a lot of different things, like pulses, vegetables, cereals, eggs, sugar, and even the price of getting around and talking to people.
Inflation Goes Down in Rural Areas All Over
In July, headline inflation in rural India fell from 1.72% in June to 1.18%. Food prices in rural areas declined even more, to -1.74%.
Urban India wasn’t far behind. Inflation dropped from 2.56% to 2.05%, and food inflation in cities dropped from -1.17% to -1.90%.
Highlights of the Sector
Housing: 3.17% in July, the same as in June (3.18%).
Education: Went down from 4.37% to 4.00%.
Health: Up a little from 4.38% to 4.57%.
Transport and Communication: The biggest reduction, from 3.90% to 2.12%.
Fuel and Light: Up a little from 2.55% to 2.67%.
Economists argue that this general drop in prices makes things easier for both policymakers and consumers, especially while the global economy is still facing substantial headwinds.
Inflation in both rural and urban areas seems to be stabilizing, which is a good sign for the short-term forecast. This should provide the Reserve Bank of India more room to focus on measures that encourage growth in the coming months.