India's retail inflation rose to 5.54 per cent in September 2026 on a year-on-year basis, provisional data released by the Ministry of Statistics and Programme Implementation on Monday showed, marking the highest inflation reading recorded so far this year and crossing the 5 per cent mark for the first time under the new CPI series.
The reading was up from 4.83 per cent in August — a 71-basis-point jump — and came in marginally above the 5.40 per cent projected by a Reuters poll. It marked the fourth consecutive month inflation has remained above the Reserve Bank of India's 4 per cent medium-term target, though it stayed within the central bank's 2-6 per cent tolerance band.
Food prices lead the surge
Food inflation, measured by the Consumer Food Price Index, jumped to 7.74 per cent in September from 5.97 per cent in August. Onion prices recorded the sharpest year-on-year increase, with onion inflation soaring to 108.09 per cent from 48.78 per cent a month earlier. Garlic inflation stood at 54.62 per cent and lemon at 36.41 per cent. The food and beverages category saw inflation of 7.36 per cent.
Rural inflation was higher than urban: rural retail inflation rose to 6.08 per cent while urban stood at 4.88 per cent. Rural food inflation came in at 8.06 per cent against 7.18 per cent in urban areas.
Rate-hike outlook strengthens
The print strengthens the case for further rate increases after the RBI's Monetary Policy Committee hiked the repo rate by 25 basis points to 5.50 per cent last week — its first hike in nearly four years — while shifting its stance from 'neutral' to 'calibrated tightening'. RBI Governor Sanjay Malhotra has said headline CPI inflation is expected to average nearly 5.8 per cent over the next three quarters.
Sources:
Retail inflation rises to 5.54% in Sep as food inflation zooms to 7.74% - Business Standard
Retail Inflation Shoots Up To 5.54% In September, Onion Prices Double - NDTV
The reading was up from 4.83 per cent in August — a 71-basis-point jump — and came in marginally above the 5.40 per cent projected by a Reuters poll. It marked the fourth consecutive month inflation has remained above the Reserve Bank of India's 4 per cent medium-term target, though it stayed within the central bank's 2-6 per cent tolerance band.
Food prices lead the surge
Food inflation, measured by the Consumer Food Price Index, jumped to 7.74 per cent in September from 5.97 per cent in August. Onion prices recorded the sharpest year-on-year increase, with onion inflation soaring to 108.09 per cent from 48.78 per cent a month earlier. Garlic inflation stood at 54.62 per cent and lemon at 36.41 per cent. The food and beverages category saw inflation of 7.36 per cent.
Rural inflation was higher than urban: rural retail inflation rose to 6.08 per cent while urban stood at 4.88 per cent. Rural food inflation came in at 8.06 per cent against 7.18 per cent in urban areas.
Rate-hike outlook strengthens
The print strengthens the case for further rate increases after the RBI's Monetary Policy Committee hiked the repo rate by 25 basis points to 5.50 per cent last week — its first hike in nearly four years — while shifting its stance from 'neutral' to 'calibrated tightening'. RBI Governor Sanjay Malhotra has said headline CPI inflation is expected to average nearly 5.8 per cent over the next three quarters.
Sources:
Retail inflation rises to 5.54% in Sep as food inflation zooms to 7.74% - Business Standard
Retail Inflation Shoots Up To 5.54% In September, Onion Prices Double - NDTV
