Retail inflation increased to 4.82% in August, largely driven by higher food prices, according to government data released on Monday (September 14, 2026). The Consumer Price Index (CPI) based inflation was 4.45% in July.

Food inflation in August increased to 5.95% compared to 5.52% in the preceding month, according to CPI data released by the National Statistics Office (NSO). Reserve Bank has projected the CPI inflation for 2026-27 at 5%, with Q2 at 4.7%, Q3 at 5.9%, and Q4 at 5.5%.

The Reserve Bank of India (RBI) recently kept key short-term policy rates unchanged amid inflation worries. RBI’s official mandate is to keep inflation within the acceptable range of 2% to 6%.

Meanwhile, the wholesale price-based inflation rose to 9.92% in August from 9.78% in July, mainly due to rising prices of food, fuel and manufactured items.

Retail inflation rose to a 19-month high of 4.45% in July, driven up by higher food and fuel prices, official data released on Wednesday showed.

The Consumer Price Index (CPI) data released by the Ministry of Statistics and Programme Implementation showed that food, restaurant and accommodation services, and transport became costlier in July, while inflation in other services such as healthcare, recreation, sports and culture, cooled marginally.

The CPI series was updated earlier this year, with a new base year of 2024. As a result, while there is historical data for the overall index that goes back to August 2021, sector-wise data is available only from January 2026 onwards. 

Costlier food ahead

Inflation in the food and beverages category quickened to 5.2% in July 2026 from 5.05% a month earlier. 

According to Rajeev Sharan, Head of Research at Brickwork Ratings, this was driven by “fresh spikes in onion and garlic alongside persistently high ginger prices, even as potato and tomato swung into deflation”.

The expectation ahead is that food inflation will rise further, Madan Sabnavis, chief economist at the Bank of Baroda said. 

“While the monsoon has recovered substantially in July, there has been news of crop damage due to excess rains,” Mr. Sabnavis said. “This, combined with a longer cropping period and hence harvest, will push up prices of pulses in particular. Global prices of edible oils are also high which is being felt in domestic markets.”

Fuel adding to fire

Driven by higher food and fuel prices, inflation in the restaurants and accommodation services segment quickened to 7.7% in July 2026, the highest this year, up from a previous yearly-high of 6.9% in June. 

“The war impact on prices can be seen from higher inflation for restaurants and food services where higher fuel prices have made units increase prices,” Mr. Sabnavis explained. “While there is some normalisation in supply of fuel, prices remain where they are and tend to be inelastic in downward direction.”

Inflation in the transport sector also quickened to 4.4% in July 2026 from 4.3% in June. 

Cooling inflation

There were, however, some services that saw inflation easing in July. 

The health segment, for example, saw inflation cooling to 1.3% in July 2026 from 1.4% in June. Inflation in this segment has been falling since February 2026. 

The other segment that saw inflation easing was the ‘recreation, sport and culture’ category to 1.6% in July 2026 from 1.75% a month earlier. 

While inflation in the ‘personal care, social protection and miscellaneous goods & services’ category — which includes gold and silver purchases — remained in double digits at 14.8% in July 2026, it was the lowest level recorded so far this year.

Retail inflation, as measured by the Consumer Price Index (CPI), increased to 3.9% in May as food prices rose, according to data from the Ministry of Statistics and Programme Implementation (MoSPI) released on Friday (June 12, 2026). The inflation rate was 3.5% in April.

Retail prices moved at the fastest pace since January 2025, when the index increased 4.06%, making the May figure the highest in 16 months.

The headline numbers had reduced since October 2024, when the inflation was over 6%. By October 2025, it had almost stagnated. From November 2025, retail inflation started rising due to the low base and now, it is just 0.07% short of the Reserve Bank of India (RBI)’s target inflation rate of 4%.

The higher print was observed both in headline and core inflation. The latter too increased to 3.73% marking three consecutive months of quickening price rise. While headline inflation covers all goods and services, core inflation is calculated without considering food, fuel and electricity prices.

The increase in retail inflation can be largely attributed to the rise in food prices, with the Consumer Food Price Index (CFPI) inflation at 4.8% in May 2026, inching up from 4.2% in the previous month.

Several food staples experienced a faster rate of inflation or slowing rate of deflation. Cereal prices increased 0.28% entering the positive territory for the first time since January 2026. Most of the increase came from rice, prices of which increased 0.23% after staying in deflation territory since the beginning of the calendar year.

Among kitchen staples, tomato prices increased 48.4% in May 2026, from 35.3% a month before, breaking a four-month trend of slowing inflation. Deflation of onion prices slowed to 2.2% in the reporting month from 17.7% in April 2026. Potato prices did not show any major signs of increase, and continued to deflate at 23% for the second consecutive month.

“The monsoon is already delayed and the advice given to farmers was to wait for the rains to arrive before sowing their seeds for the relevant crops,” said Madan Sabnavis, Chief Economist at the Bank of Baroda.

Housing, water, electricity, gas and other fuels inflation — the second largest group of items constituting 17.6% of the retail basket — quickened to 1.73% in May 2026, from 1.71% a month before. LPG and other categories slowed for the third straight month to 2.02% from more than 5% in March 2026. Petrol and diesel inflation rose to 6% in May 2026, from 2.8% in April 2026 and just 0.5% in March 2026, showing the transmission of fuel costs. Fuel inflation, however, stayed above February levels of 1.7%.

Higher fuel prices also showed in the inflation print of transport goods. Transport costs that shrunk mildly or were stagnant since January 2026, increased 1.75% in May 2026, mostly attributable to the increase in logistics prices due to the war in West Asia.

The May 2026 inflation was broadly in line with economists’ forecasts. Further, economists expect the retail goods to become dearer in June 2026 due to cost transmission from the West Asia war. The annual CPI inflation is expected to be anywhere between 5% and 5.5%, with potential rate hikes in October 2026 or December 2026 monetary policy review. Besides the cost passing through from West Asia, analysts are also tracking the less-than normal monsoon ensuing from El Nino.