India's retail inflation eases to 2.1% in June, lowest since January 2019

India's retail inflation, measured by the Consumer Price Index (CPI), declined to 2.1% in June 2025, down from 2.82% in May, according to data released by the Ministry of Statistics and Programme Implementation. This marks the lowest year-on-year inflation since January 2019, when the figure was 2.05%. The Reserve Bank of India's (RBI) medium-term target of 4% was not met, as inflation continued its downward trend driven by base effects and softening food and fuel prices. Food inflation, measured by the Consumer Food Price Index (CFPI), turned negative in both rural and urban areas, with rural food inflation at -0.92% and urban food inflation at -1.22%. This significant drop is attributed to favourable base effects and declines in inflation across various food categories, including vegetables, pulses, cereals, meat and fish, sugar, milk, and spices. In rural areas, overall inflation fell to 1.72%, down from 2.59% in May, while urban inflation eased to 2.56%, compared to 3.12% the previous month. Fuel and light inflation also slowed to 2.55% in June from 2.84% in May. Among states, Kerala recorded the highest YoY inflation at 6.71%, with its CPI index rising to 213.1 from 199.7 in June 2024.
In its June bimonthly policy meeting, the RBI revised its inflation forecast for FY26 downwards to 3.7%, with the Q1 expected to average 2.9%. The central bank projected inflation at 3.4% for Q2, 3.9% for Q3, and 4.4% for Q4 in FY26. Meanwhile, India's Wholesale Price Index (WPI) inflation fell to -0.13% in June from 0.39% in May, registering its first negative reading in 2025. This decline was primarily due to falling prices in food articles, fuel and power, and basic metals. The easing of inflation across both retail and wholesale sectors indicates a general trend of subdued price pressures in the economy, which could influence the RBI's future monetary policy decisions.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.