Retail Inflation Eases Sharply To 1.55%; Top 5 States With Highest And Lowest CPI
India's retail inflation dropped to an eight-year low of 1.55% in July 2025. Kerala had the highest inflation at 8.89%, while Assam had the lowest at -0.61%.
Retail Inflation In July 2025: India's retail inflation hit an eight-year low of 1.55 per cent in July 2025 majorly driven by a decline of food inflation, including prices of pulses, vegetables, cereals, eggs, sugar and transport costs. This is down from 2.10% in June 2025 and marks a 55-basis-point drop month-on-month.
It is the lowest inflation print after June 2017. The CPI-based inflation had stood at 2.10 per cent in May 2025.
Still, in some states, combined retail inflation remained way higher than the national average. Kerala topped the chart to have the highest combined retail inflation at 8.89 per cent in the country. Kerala is followed by Jammu & Kashmir and Punjab.
Looking at the lowest inflation states in the country, Assam topped the list.
On the other hand, Assam saw the steepest decline at -0.61%, with Telangana, Odisha, Bihar, and Uttar Pradesh also among the lowest inflation states.
Vivek Rathi, National Director- Research, Knight Frank, India said, since the decline in inflation is largely driven by contracting vegetable prices, which are seasonal in nature, and prices in the non-food category remain sticky, the boost to disposable incomes is likely to be modest. As a result, domestic consumption demand is unlikely to see a significant pickup.
CPI inflation came in at 1.55%, slightly above market expectations of 1.40%, but well in line with RBI trajectory. This was largely on account of low food inflation. We believe CPI would be well anchored going ahead also, and might undershoot RBI trajectory, points out Akhil Mittal, Senior Fund Manager – Fixed Income, Tata Asset Management.
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