India's retail inflation drops to 2.1% in June, marking the lowest level since January 2019.

According to data from the Ministry of Statistics and Programme Implementation, India's retail inflation, as measured by the Consumer Price Index (CPI), fell to 2.1% in June 2025, a decrease from 2.82% in May. This represents the lowest annual inflation rate since January 2019, when it was 2.05%. The Reserve Bank of India's (RBI) medium-term goal of 4% was missed, as inflation remained on a downward path influenced by base effects and declining food and fuel costs. Food inflation, as indicated by the Consumer Food Price Index (CFPI), went negative in both rural and urban regions, showing rural food inflation at -0.92% and urban food inflation at -1.22%. This notable decrease is credited to positive base effects and reductions in inflation across several food groups, such as vegetables, pulses, cereals, meat and fish, sugar, milk, and spices. In rural regions, total inflation decreased to 1.72%, down from 2.59% in May, whereas urban inflation dropped to 2.56%, in contrast to 3.12% in the prior month. Inflation for fuel and light decreased to 2.55% in June, down from 2.84% in May. Kerala had the highest YoY inflation rate at 6.71%, as its CPI index increased from 199.7 to 213.1 in June 2024. During its June bimonthly policy meeting, the RBI lowered its inflation projection for FY26 to 3.7%, anticipating an average of 2.9% for Q1. The central bank forecasted inflation to be 3.4% for Q2, 3.9% for Q3, and 4.4% for Q4 in FY26. Simultaneously, India's Wholesale Price Index (WPI) inflation dropped to -0.13% in June, down from 0.39% in May, marking its initial negative result in 2025. The decrease was mainly attributed to decreasing prices in food items, energy, and fundamental metals. The reduction of inflation in both retail and wholesale markets suggests a widespread trend of limited price pressures in the economy, which might