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Retail Inflation Rises Marginally to 2.7% in August, Food Prices Edge Up

  • By Thetripurapost Desk, New Delhi
  • Sep 12, 2025
  • 841

Retail inflation in India inched up in August, touching 2.7%, compared with 1.61% in July, according to official data released today. The slight uptick is largely driven by a rise in the prices of certain food items, even as overall inflation remains well within the Reserve Bank of India’s (RBI) comfort zone of 4% ± 2%.

Food Prices Put Pressure on Inflation

Food items, which account for nearly half of the Consumer Price Index (CPI) basket, saw their inflation rate move from –1.76% in July to –0.69% in August. While still in negative territory, the slower decline indicates easing price relief and a gradual rebound in food costs.

Rural and Urban Trends

Rural inflation: Rose from 1.18% to 1.69%.

Urban inflation: Increased from 2.10% to 2.47%.
This widening in both segments signals a broad-based shift, though the pace remains moderate.


RBI’s Inflation Outlook

At its Monetary Policy Committee (MPC) meeting earlier in August, the RBI had already revised its inflation projection for FY 2025–26 downwards from 3.7% to 3.1%, citing stable macroeconomic conditions and improving supply chains.

Understanding the Inflation Dynamics

Economists point out that inflation typically rises when demand outpaces supply. An increase in disposable income leads consumers to buy more, pushing up demand. If supply fails to keep pace, prices rise. Conversely, when supply exceeds demand, inflation softens.

Impact on Consumers

For households, these figures are more than just numbers. Inflation directly reflects in the Consumer Price Index (CPI), which tracks changes in the prices of goods and services people purchase every day. From groceries to essentials, even small shifts in inflation can alter monthly budgets.

Bottom Line:


India’s inflation, though up slightly in August, remains comfortably within the RBI’s target band. With food prices showing early signs of recovery, all eyes will be on the coming months to see if this trend strengthens — or if supply stability reins in the price pressures.