India’s July 2025 Retail Inflation Falls to 8-Year Low at 1.55%, Official Data Released in August Brings Relief to Consumers

On 12 August 2025, official data revealed that India’s retail inflation dropped to 1.55% in July 2025 — the lowest level since June 2017 — offering significant relief to households and policymakers alike. The sharp fall from June’s 2.10% rate was driven mainly by a decline in food prices, particularly vegetables, pulses, and edible oils, alongside a favourable base effect from last year’s higher costs. Core inflation, which excludes volatile food and fuel prices, also eased, signaling a broader slowdown in price pressures across multiple sectors of the economy.

This low inflation is a welcome boost for middle- and low-income families who have struggled with high living costs in recent years, as grocery bills and essential household expenses show noticeable improvement. Economists note that the Reserve Bank of India (RBI) may now consider holding or even cutting interest rates to encourage growth, especially ahead of the festive season, while keeping a close watch on global oil prices, currency trends, and domestic demand.

However, experts caution that rural wage growth remains weak, and unpredictable weather events such as floods or droughts could reverse the current gains. On the global stage, India’s rare low-inflation environment stands in contrast to persistent price pressures in many advanced economies, potentially enhancing export competitiveness and keeping imports more affordable.

The challenge ahead lies in sustaining this stability — requiring strong agricultural output, effective supply chain management, and fiscal discipline. For now, the record-low inflation rate gives both consumers and the government valuable breathing space to focus on growth, investment, and long-term economic stability in the months ahead.