New Delhi: Retail inflation in India eased to a more than six-year low of 2.1% in June 2025, primarily due to a significant drop in food prices, according to the National Statistics Office (NSO). The Consumer Price Index (CPI)-based inflation stood at 2.82% in May 2025 and 5.08% in June 2024. This marks the lowest year-on-year inflation rate since January 2019, when it was recorded at 1.97%.
The NSO attributed the sharp decline to both a favourable base effect and falling prices across key food categories, including vegetables, pulses, cereals, milk, meat, fish, sugar, and spices. The statement noted a 72-basis-point drop in the headline inflation from May to June, reflecting an overall cooling in consumer prices amid steady supply and easing input costs in the agricultural sector.
Economists say the data signals a positive trend for the economy and may provide the Reserve Bank of India (RBI) with more flexibility in monetary policy. With inflation comfortably below the RBI’s upper tolerance limit of 6%, the central bank is expected to maintain a stable policy stance unless global economic shocks trigger new inflationary pressures.
The sustained dip in inflation could boost consumer sentiment and purchasing power in the coming months. The next CPI update, expected in mid-August, will offer further insight into whether this downward trend continues into the second half of the financial year.
