Retail Inflation Falls to 1.55% | Top 5 States with Highest & Lowest CPI

Retail Inflation Falls to 1.55%: The retail inflation in India went down to 1.55 per cent in July 2025 which is an eight-year low primarily due to slip in food inflation, cost of pulses, vegetables, cereal, eggs, sugar and transportation. This is reduced compared to 2.10% in June 2025 and is also a decrease of 55 basis points a month.

It is the lowest post June 2017 inflation print. In May 2025 inflation, as measured by CPI, had been 2.10 per cent.

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Nevertheless, in certain states, combined retail inflation was significantly higher than the national one. Kerala was ranked topmost to record the highest retail inflation at 8.89 per cent in the nation. Next to Kerala comes Jammu & Kashmir and then Punjab.

Due to the least inflation states in the country, Assam ranked first.

Conversely, the sharpest drop was recorded in Assam at -0.61 percent and Telangana, Odisha, Bihar, and Uttar Pradesh were other states with lowest inflation rates.

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Since fall of inflation is more caused due to contracting vegetable prices, which are seasonal in nature, and that in the non-food category, prices are sticky, increment to disposable incomes would be minimal, said Vivek Rathi, National Director- Research, Knight Frank, India. This means that domestic consumption demand, consequently, is not likely to display a considerable improvement.

The CPI inflation stood at 1.55% as compared to the market expectations of 1.40% although perfectly aligned with the RBI trajectory. This was majorly due to low food inflation. We feel that CPI would also be anchored properly in the future and it may be under shooting the RBI trajectory, says Akhil Mittal, Senior Fund Manager- Fixed Income, Tata Asset Management.

Top 5 Highest & Lowest Inflation States (Combined, July 2025)

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