New Delhi: India’s Consumer Price Index (CPI)-based retail inflation dropped sharply to 1.54 percent in September 2025, as per data released by the National Statistics Office (NSO). This is the lowest inflation rate recorded since June 2017, offering relief to both consumers and the government. Compared to August 2025, headline inflation fell by 53 basis points.
Food Prices See Major Fall
One of the biggest reasons behind the fall in overall inflation was the decline in food prices. Items like vegetables, pulses, cereals, fruits, oil, eggs, and even fuel and light saw a drop in prices. This led to a 164 basis point decrease in food inflation compared to August. In urban areas, food inflation stood at -2.47 percent, while in rural areas, it was 2.17 percent. Overall, this was the lowest food inflation recorded since December 2018.
State-wise Inflation Trends
Among the Indian states, Kerala reported the highest inflation at 9.05 percent, followed by Jammu & Kashmir (4.38 percent), Karnataka (3.33 percent), Punjab (3.06 percent), and Tamil Nadu (2.77 percent). These states bucked the national trend and continue to see relatively higher price rises.
Sector-wise Inflation Snapshot
In specific sectors, housing inflation rose to 3.98 percent in September from 3.09 percent in August. Health inflation slightly eased to 4.34 percent, and education inflation came down to 3.44 percent. The fuel and light category saw a drop to 1.98 percent, while transport and communication inflation fell to 1.82 percent.
