Retail Inflation Crosses 5%, Food Inflation Hits 7.74%: What Became Costlier In September

India’s retail inflation accelerated in September, driven by rising food prices and higher costs across several consumption categories, putting additional pressure on household budgets. The increase in consumer prices was more pronounced in rural areas, where both overall and food inflation remained higher than in urban areas.

According to data released on Monday, October 12, retail inflation, measured by the Consumer Price Index (CPI), rose to 5.54% in September 2026 from 4.83% in August. Food inflation, measured by the Consumer Food Price Index (CFPI), increased to 7.74% from 5.97% during the same period.

The latest retail inflation figure was also higher than the 4.42% forecast by the PHDCCI PriceNexus Engine (PPNE), according to the industry body.

Rural Inflation Higher Than Urban Rate

Rural CPI inflation increased to 6.08% in September from 5.24% in August, while urban inflation rose to 4.88% from 4.31%. Rural food inflation climbed to 8.06% from 6.17% in August. In urban areas, food inflation increased to 7.18% from 5.64%.

According to PHDCCI President Anil Gupta, the acceleration in consumer prices, particularly food inflation, has implications for household purchasing power and consumption expenditure. The higher inflation rates in rural areas also underline the importance of monitoring food prices and their impact on rural household budgets.

Onion Inflation Crosses 100%

Among the major consumption divisions, personal care, social protection and miscellaneous goods and services recorded the highest inflation at 13.75% in September. Restaurants and accommodation services followed at 9.36%, while food and beverages recorded inflation of 7.36%. Transport inflation stood at 5.01%.

At the individual-item level, onion prices recorded year-on-year inflation of 108.09% in September, up from 48.78% in August. Silver jewellery inflation stood at 87.80%, followed by ginger at 62.85%, garlic at 54.62% and lemon at 36.41%.

However, some commodities recorded price declines. Potato prices fell 11.50% year-on-year, while tomato prices declined 8.62%. Motor cars and jeeps recorded a fall of 4.51%, followed by lady’s finger at 4.48% and coconut at 3.99%.

Uneven Price Pressures Across Categories

Inflation remained comparatively moderate in health at 1.40%, recreation, sport and culture at 2.16%, information and communication at 2.44%, and housing, water, electricity, gas and other fuels at 2.74%.

PHDCCI SG and CEO Dr Ranjeet Mehta said inflation trends remained uneven across consumption categories, with particularly high increases in selected food commodities, personal care and miscellaneous goods and services, and restaurants and accommodation.

He said a detailed assessment of price pressures, supported by efficient logistics, better market information and coordinated supply-side measures, could help improve price stability while supporting sustainable economic growth.