India’s retail inflation rate rose to 2.07% in August 2025, up from 1.61% in July. Despite the rise in prices of items like vegetables and meat, the figure is within the Reserve Bank of India’s (RBI) target of 2-6%, giving the central bank scope to focus on economic growth. The recent repo rate cut and reduction in inflation forecast for the year 2025-26 to 3.7% is a clear indication in this direction.

According to data released by the Ministry of Statistics and Program Implementation on Friday, India’s retail inflation, measured by the Consumer Price Index (CPI), rose marginally to 2.07 percent in August 2025 on a year-on-year basis.

This is an increase of 46 basis points in the core inflation of August 2025 compared to July. The year-on-year food inflation rate based on the All India Consumer Food Price Index (CFPI) for August, 2025 as compared to August, 2024 is -0.69% (provisional). The corresponding inflation rates for rural and urban areas are -0.70% and -0.58%, respectively.