In July 2025, the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) released the ‘Consumer Price Index (CPI) for rural, urban and combined for the month of June 2025’. As per the official data, India’s retail inflation measured by CPI, declined to a 75-month low (6 years) to 2.10% in June 2025, down from 2.82% in May 2025..
- This is the lowest Year-on-Year (Y-o-Y) inflation registered since January 2019.This also marks the 5th consecutive month that inflation has stayed below the Reserve Bank of India (RBI)’s medium-target of 4%.
- The Wholesale Price Index (WPI) slipped into deflation after 19 months, falling to -0.13% in June 2025, compared to 0.39% in May 2025.
Key highlights:
i.Food Inflation: The NSO’s data showed that Year-on-Year (Y-o-Y) inflation rate based on All India Consumer Food Price Index (CFPI) for the month of June 2025 over June 2024 is -1.06% (Provisional).
- The food inflation, which accounts for nearly 50% of CPI basket, in June 2025 saw a sharp decline of 205 basis points (bps) compared to 0.99% in May 2025.
- This decline in food inflation was largely driven by favourable base effects and lower prices in various categories like: vegetables, pulses, meat and fish, cereals, sugar, milk, among others.
ii.Rural Inflation: The headline inflation in rural areas of the country has decreased from 2.59% (in May 2025) to 1.72% (Provisional, in June 2025).
- While, the rural CFPI-based food inflation registered negative growth of -0.92% (Provisional, in June 2025) compared to 0.95% (in May 2025).
iii.Urban Inflation: In urban India, the headline inflation decreased from 3.12% (in May 2025) to 2.56% (Provisional, in June 2025).
- Similarly, food inflation in urban areas of the country declined from 1.01% to -1.22% for the same period of time as for headline inflation.
iv.Core Inflation: Despite the drop in food prices, core inflation rose to 4.4% in June 2025, the highest level since September 2023.
iv.Top 5 States/UTs with highest inflation rate: Kerala topped among all Indian states or Union Territories (UT) with high Year-on-Year (Y-o-Y) inflation rate of 6.71% for the month of June 2025, followed by Punjab (4.67%), Union Territory (UT) Jammu & Kashmir (J&K) (4.38%), Uttarakhand(3.40%), and Haryana (3.10%).
Important Terms:
- Consumer Price Index (CPI): It measures the average change over time in the prices paid by consumers for a fixed basket of goods and services.
- Wholesale Price Index (WPI): It measures the average change in prices of goods at the wholesale level, meaning before they reach the retail market.
- Inflation is the rate of increase in prices over a given period of time.
