India’s inflation rate ticked up slightly in August, showing a modest rise in wholesale and retail prices, but good news for consumers came from falling food costs. The Ministry of Commerce and Industry released the latest Wholesale Price Index (WPI) data on Monday, revealing that WPI inflation climbed to 0.52% for the month. This marks a shift from July’s two-year low of -0.58%, driven mainly by higher prices in food products, manufactured goods, non-food articles, and items like non-metallic minerals and transport equipment.
While some sectors pushed inflation higher, fuel prices offered relief. Petrol, diesel, and natural gas costs kept dropping, pulling fuel inflation deeper into negative territory at -3.17%. Month-over-month, WPI rose by 0.52% compared to July, when lower food article prices had cooled things down.
Switching to the consumer side, the Consumer Price Index (CPI) inflation also edged up to 2.07% in August, up from July’s 1.61%—the lowest retail inflation since June 2017. The Ministry of Statistics shared this update on Friday. Even so, this rate stays comfortably below the Reserve Bank of India’s (RBI) 4% target, giving the central bank room to maintain its easy monetary policy and boost economic growth.
Food inflation stayed negative for the third month in a row at -0.69%, easing the load on everyday shoppers. Vegetable prices plunged by 15.92%, pulses got cheaper by 14.53%, and spices dropped 3.24%. That said, some upticks in meat, fish, edible oils, fats, eggs, and personal care items nudged overall food inflation higher than July’s levels.
Looking ahead, the RBI forecasts CPI inflation at 3.1% for the 2025-26 fiscal year. RBI Governor Sanjay Malhotra recently highlighted a brighter outlook, thanks to a strong southwest monsoon, healthy kharif crop sowing, good reservoir levels, and solid foodgrain stocks. “The inflation outlook for 2025-26 has become more benign than expected in June,” he noted, crediting large base effects and favorable weather for keeping food prices stable.
These trends suggest India’s economy is balancing growth with controlled inflation, with lower food and fuel costs providing a silver lining for households amid the slight uptick.
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