India’s retail inflation has taken a notable dip, hitting its lowest point in over six years. According to the latest government data, the Consumer Price Index (CPI) dropped to 2.1 percent in June 2025, driven largely by falling food prices. This marks the lowest inflation rate since January 2019, with food inflation even turning negative during the month. The trend is raising hopes for more economic relief in the coming months.
Fresh projections for July 2025 suggest that inflation could remain subdued. The State Bank of India (SBI) predicts an average CPI inflation rate of 3.0 to 3.2 percent for FY26, which is notably lower than the Reserve Bank of India’s earlier estimate of 3.7 percent. This figure also falls well below the previous fiscal year’s average inflation rate of 4.6 percent, signaling a potential easing of price pressures.
The RBI has revised its own forecast downward, now expecting CPI inflation for FY26 at 3.1 percent, down from the earlier projection of 3.7 percent. Despite this adjustment, the central bank has kept its real GDP growth forecast steady at 6.5 percent. RBI Governor Sanjay Malhotra remarked that the inflation outlook has turned more favorable than anticipated just a month ago, pointing to improved economic conditions.
Meanwhile, Delhi’s Union Budget for 2025-26 allocated ₹1,348 crore to the National Capital Territory, reflecting an uptick in loans and advances by ₹100 crore, while grants-in-aid remained unchanged from the previous year. This move could help stabilize local markets and further support inflation control measures.
As India navigates these shifting economic trends, experts are keeping a close watch on food prices and policy decisions that could shape inflation in the coming months. With projections looking optimistic, consumers may find some respite from the high costs that have weighed on household budgets in recent years.