India Retail Inflation Rises To 4.45% In July As Food Prices Stay Elevated

India’s retail inflation continued its upward trend in July, rising to 4.45% compared with 4.38% in June, as persistent food price pressures pushed consumer prices higher.

This was the fourth straight month of increase in headline inflation and the second consecutive month when inflation remained above the Reserve Bank of India’s 4% target.

Inflation has accelerated steadily since the beginning of the financial year, rising from 3.48% in April to 3.93% in May, 4.38% in June and 4.45% in July.

Food prices remain key inflation driver

Food prices remained the biggest contributor to the rise, with Consumer Food Price Index-based inflation increasing to 5.52% in July from 5.32% in the previous month.

Rural India continued to face higher price pressures, with food inflation at 5.79%, compared with 5.05% in urban areas. Overall rural inflation rose to 4.84% in July from 4.74% in June, while urban inflation increased marginally to 3.96% from 3.93%.

The gap between rural and urban inflation was visible across several categories. Inflation in food and beverages stood at 5.53% in rural areas against 4.75% in cities. Clothing and footwear inflation was also higher in rural regions at 3.97%, compared with 2.41% in urban areas.

Spices, jewellery prices surge; vegetables offer relief

Several individual products witnessed sharp price increases during July. Ginger prices rose 83.62% year-on-year, compared with 50.41% in June, while garlic inflation climbed to 35.36% from 17.93%. Onion prices also saw a significant rise, with inflation increasing to 22.54% from 4.73%.

Precious metals continued to experience strong price gains. Silver jewellery prices surged 109.84% from a year earlier, while gold, diamond and platinum jewellery recorded inflation of 32.98%.

Services also contributed to price pressures, with restaurants and accommodation services recording inflation of 7.72% and transport services seeing inflation of 4.43%. Personal care, social protection and miscellaneous services recorded inflation of 14.77%.

However, some vegetables helped ease overall food inflation. Tomato prices declined 4.59% year-on-year in July after rising 31.92% in June. Potato prices fell 16.56%, while lady’s finger prices declined 5.52%.