Retail Inflation Hits Two-Year High of 5.54% as Food Inflation Surges to 7.74%
India’s retail inflation rose to a two-year high of 5.54% in September 2026, driven by food inflation surging to 7.74%. Rural food inflation reached 8.06%, while onion prices more than doubled year-on-year. Ginger, garlic and lemon also recorded sharp increases, adding to household budget pressures across the country.
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India’s retail inflation rose to a two-year high of 5.54% in September 2026, driven largely by a sharp acceleration in food prices, according to provisional data released by the National Statistics Office (NSO) on Monday. Retail inflation, measured by the Consumer Price Index (CPI), stood at 4.83% in August 2026. It was 6.21% in October 2024.
Food inflation, measured by the Consumer Food Price Index (CFPI), climbed to 7.74% in September from 5.97% in August, highlighting the growing pressure of food costs on household budgets. The increase was more pronounced in rural areas, where food inflation reached 8.06%, compared with 7.18% in urban India.
The acceleration in food prices was reflected in the broader inflation figures. Rural retail inflation rose from 5.24% in August to 6.08% in September, while urban inflation increased from 4.31% to 4.88%. The sharper rise in rural inflation points to the greater pressure on rural households, where food expenditure constitutes a significant part of consumption.
Among individual food items, onion prices recorded the steepest increase, with inflation surging to 108.09% in September from 48.78% in August. Ginger prices rose 62.85%, while garlic inflation accelerated to 54.62% from 43.60% in the previous month. Lemon prices increased 36.41%, compared with 15.15% in August.
However, some vegetables continued to record year-on-year price declines. Potato prices fell 11.50%, while tomato prices declined 8.62%. Lady’s finger prices were down 4.48%. The contrasting movements indicate that price pressures remain uneven across food commodities.
The food and beverages category recorded inflation of 7.36% in September. Within the broader consumption basket, food inflation was accompanied by a 9.39% rise in prices of food and beverage serving services. Transport services for goods became 14.73% more expensive, potentially adding to costs across supply chains.
Beyond food, inflationary pressure was also visible in several other consumption categories. Prices of food and beverage serving services rose 9.39% year-on-year in September, while transport services for goods recorded inflation of 14.73%. Prices of goods and services under personal care and miscellaneous expenditure increased 13.75%. Transport inflation stood at 5.01%, while clothing and footwear prices rose 3.93%. In contrast, health inflation remained relatively moderate at 1.40%, and housing, water, electricity, gas and other fuels recorded inflation of 2.74%.
