India's retail inflation rises to 5.54% in September from 4.83% in August

India's consumer price inflation rose to 5.54% in September from 4.83% in August, according to provisional data the Ministry of Statistics and Programme Implementation released on Monday, October 12. All figures below are year-on-year unless stated.

The headline figure

Mint reports that 5.54% is a 23-month high and that inflation has stayed above the Reserve Bank of India's 4% midpoint target for a fourth consecutive month. It compares with a forecast of 5.6% from 19 economists in a Mint survey. The Indian Express reports that it is the highest reading in the new series, which has data from January 2026, and the highest in almost two years if the old 2012-base series is included; the previous high there was 6.21% in October 2024. The Hindu describes September as the highest since October 2024.

Both Mint and The Indian Express say the data cannot be directly compared with year-earlier figures because the index was rebased in January with 2024 as the base year. Mint reports the revised January inflation rate at 2.74%.

What drove the increase

Food inflation rose to 7.74% in September from 5.97% in August, according to The Indian Express and Mint, which attribute the rise to vegetables, fruits and sugar-related items. Mint gives earlier monthly food figures of 5.52% in July, 5.32% in June, 4.78% in May and 4.20% in April. The Hindu reports a different measure, food and beverages, at 7.4% in September against 5.7% in August.

In The Indian Express, ICRA chief economist Aditi Nayar is quoted as saying that 62 basis points of the 71-basis-point rise from August came from food and beverages. The report adds that core inflation, which excludes food and fuel, rose to 4.3% from 4.1%, and that prices of consumer electronics kept rising, which it links to a shortage of memory chips. It also says that 11 of the 12 major CPI categories showed higher inflation, and that 319 of the 358 items rose in price from August, up from 314 a month earlier.

On a monthly basis, the overall index was 0.7% higher in September than in August, according to The Indian Express. It reports inflation for restaurants and cafes at 9.39%, up from 2.73% in February. Mint reports inflation for restaurant and accommodation services at 9.36% against 8.38% in August, and for transport services at 5.01% against 4.6%. Mint says Brent crude has risen 12% to 14% this month to above $103 a barrel.

Regional and policy context

Mint reports that inflation was highest in Andhra Pradesh, Telangana, Tamil Nadu, Madhya Pradesh, Puducherry, Dadra and Nagar Haveli and Daman and Diu, Uttar Pradesh and Odisha, and lowest in Delhi, Mizoram, Tripura, Meghalaya, Lakshadweep, Arunachal Pradesh, Goa and Nagaland.

The release came days after the RBI raised its policy repo rate by 25 basis points to 5.5%, its first increase in more than three and a half years according to The Indian Express, and changed its policy stance to calibrated tightening. The RBI expects CPI inflation to average 4.9% in July-September, 6% in October-December and 5.7% in January-March 2027, The Indian Express reports. Madan Sabnavis, chief economist at Bank of Baroda, said in the same report that he expects another rate increase in December.