India Retail Inflation Climbs to 5.54% in September 2026 as Food Inflation Hits 7.74%

Key facts

• India's retail inflation, based on the Consumer Price Index (CPI), rose to 5.54% in September 2026 from 4.83% in August, remaining just within the Reserve Bank of India (RBI)'s tolerance band, per National Statistics Office (NSO) data released on October 12, 2026.
• Food inflation, measured by the Consumer Food Price Index (CFPI), spiked to 7.74% in September 2026 from 5.97% in August, a 21-month high, driven by costlier onion, ginger, garlic, sugar, chicken and edible oils.
• The top five items with high inflation in September were onion (108.09%), silver jewellery (87.8%), ginger (62.85%), garlic (54.62%) and lemon (36.41%).
• Inflation remained negative for potatoes (-11.5%), tomatoes (-8.62%), lady's fingers (-4.48%), coconuts (-3.99%), and motor cars and jeeps.
• CPI inflation for rural areas stood at 6.08% and urban areas at 4.88% in September 2026; the highest-inflation states were Tamil Nadu, Odisha, Madhya Pradesh, Telangana and Andhra Pradesh, while Mizoram recorded the lowest.
• September 2026 inflation was the highest since the new CPI series with base year 2024 took effect in January 2026.
• The RBI recently raised its benchmark repo rate by 25 basis points to 5.50%, its first hike in nearly four years, and raised its retail inflation forecast for the current fiscal year to 5.2% from 5%, with quarterly projections of Q2 at 4.9%, Q3 at 6.0% and Q4 at 5.7%.
• The government has mandated the RBI to keep inflation at 4% with a margin of 2% on either side.
• Average retail onion prices rose to Rs 53.37/kg, up 112% year-on-year, attributed to a reported 5-7% decline in kharif onion output in Maharashtra due to lower acreage and delayed monsoon rains.
• Inflation in rice rose to 8.25% in September from 5.89% in August, and paddy sowing lagged 4% at 42.68 million hectares in the ongoing kharif season due to deficient monsoon rains.
• The NSO collects real-time price data from 1,407 urban markets and 1,465 villages across all States/UTs weekly, with a 100% response rate in September 2026.