India’s retail inflation dropped sharply to 1.55% YoY in July 2025 (from 2.10% in June), marking the lowest level since June 2017. For the first time since Jan 2019, CPI has also slipped below RBI’s 2% lower tolerance band.
🥦 Food Prices Enter Negative Zone:
The Consumer Food Price Index fell to –1.76%, led by steep declines in vegetables, pulses, cereals, eggs, sugar, and other essentials.
🏡 Rural vs Urban CPI:
Rural CPI: 1.18% (June: 1.72%)
Urban CPI: 2.05% (June: 2.56%)
📌 Other Key Sectoral Data (Provisional):
Housing (Urban): 3.17%
Education: 4.00%
Health: 4.57%
Transport & Communication: 2.12%
Fuel & Light: 2.67%
🏦 RBI’s Policy & Outlook:
The RBI kept the repo rate unchanged at 5.5% with a neutral stance, while revising inflation forecasts downward:
Q2 FY26: ~2.1%
Q3 FY26: ~3.1%
Q4 FY26: ~4.4%
Early FY26–27: ~4.9%
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