September 2025 Inflation Data: India’s CPI hits 8-year low at 1.54% as food prices fall

September 2025 Inflation Data: India’s inflation cooled significantly in September 2025, with the Consumer Price Index (CPI) showing a year-on-year increase of just 1.54 per cent, the lowest since June 2017.

This marks a sharp decline of 53 basis points from August 2025, signalling easing price pressures across the country.

Food Inflation Remains Negative

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The slowdown is largely due to falling food prices and favourable base effects, providing relief to consumers.

Food inflation remained in negative territory for the fourth consecutive month, reflecting declining costs of essential items.

The All India Consumer Food Price Index (CFPI) registered a contraction of 2.28 per cent in September 2025.

Rural vs Urban Food Price Trends

Rural areas saw food prices fall by 2.17 per cent, while urban areas experienced a sharper decline of 2.47 per cent.

This drop is mainly driven by lower prices of vegetables, fruits, pulses, cereals, oils and fats, eggs, and other food products.

The decline in food inflation is the steepest since December 2018.

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Sector-Wise Inflation Performance

Looking at sector-wise performance, rural headline inflation eased to 1.07 per cent in September 2025 from 1.69 per cent in August, while urban headline inflation fell from 2.47 per cent to 2.04 per cent.

The rural sector’s food inflation moved from -0.70 per cent in August to -2.17 per cent in September, whereas urban food inflation dropped from -0.53 per cent to -2.47 per cent.

Key Components of CPI

Among key components of CPI:

• Housing inflation rose to 3.98 per cent in September 2025 from 3.09 per cent in August, reflecting continued cost pressures in urban housing.
• Education inflation slightly eased to 3.44 per cent from 3.60 per cent.
• Health inflation remained largely stable at 4.34 per cent compared to 4.40 per cent in August.
• Transport and communication costs grew moderately by 1.82 per cent, slightly lower than August’s 1.94 per cent.
• Fuel and light prices also showed a modest decline, rising by 1.98 per cent compared to 2.32 per cent in the previous month.