India's retail inflation falls to 6-year-low of 2.1% in June
What's the story
India's retail inflation, as measured by Consumer Price Index (CPI), has hit a six-year-low of 2.1% in June, a sharp decline from May's rate of 2.82%. Notably, inflation has also stayed below the Reserve Bank of India (RBI)'s medium-term target of 4% for fifth straight month, and under upper limit of 6% for eighth consecutive month. The drastic drop is mainly due to positive base effects and lower inflation rates in major food categories and products like meat and fish.
Food prices
CFPI declines across India
The All India Consumer Food Price Index (CFPI) recorded a year-on-year (YoY) inflation rate of -1.06% in June 2025, against the same month last year. The decline was observed across both rural and urban areas with rates of -0.92% and -1.22%, respectively, indicating a nationwide trend in falling food prices.
Sector-wise impact
Rural inflation at 1.72%; urban housing costs rise
In rural India, the CPI inflation rate for June 2025 was 1.72%, down from May's rate of 2.59%. Urban India also witnessed a decline, with the CPI inflation rate dropping to 2.56% in June from May's 3.12%. However, housing costs in urban areas saw a slight increase with an annual rise of 3.24% for the same month, up from May's rate of 3.16%.
Additional sectors
Transport, education sectors see slight increase
The combined transport and communication inflation rate for rural and urban areas stood at 3.9% in June 2025, slightly higher than May's rate of 3.85%. The education sector also saw an increase with a combined rural-urban inflation rate of 4.37%, up from May's figure of 4.12%. The fuel and light inflation rate across rural and urban areas eased to 2.55% in June 2025, down from 2.84% in May. Meanwhile, consolidated health inflation rose slightly to 4.43%, up from 4.34%.