The rise in headline inflation during August 2025 is mainly attributed to increase in inflation of vegetables, meat and fish, oil and fats
After India’s retail inflation hit an eight-year low of 1.55 per cent in July 2025, the consumer price index (CPI)-based headline inflation has inched up to 2.07 per cent in August 2025, government data showed on Friday.
Along with the fading of base effects, an increase in headline inflation during August 2025 is mainly attributed to increase in inflation of vegetables, meat and fish, oil and fats, personal care and affects, egg. Food inflation, which accounts nearly half of the CPI basket, fell 0.69 per cent as compared to a decline of 1.76 per cent in July.
Headline inflation in rural sector rose to 1.69 per cent in August as compared to 1.18 per cent in July. The food inflation in rural sector was observed as -0.7 per cent in August, compared to 1.74 per cent in July. Headline inflation in urban sector increased to 2.47 per cent during the month from 2.1 per cent in July, while the food inflation also rose to -0.58 per cent from -1.9 per cent in July.
The year-on-year transport and communication inflation rate for August 2025 was 1.94 per cent, compared to 2.12 per cent rate in July. It is combined inflation rate for both rural and urban sector. YoY fuel and light inflation rate for August was 2.43 per cent. Corresponding inflation rate for the month of July was 2.67 per cent, data from Ministry of Statistics and Programme Implementation showed.
Headline inflation is expected to remain below the Reserve Bank of India’s (RBI) 4 per cent target in 2025, the central bank said in its August Bulletin, pointing to easing pressures from food and fuel.
Retail inflation averaged 3.9 per cent in the June quarter of FY26, down from 5.4 per cent in the same period a year earlier, the report noted. Core inflation dropped to 3.1 per cent in July, its lowest level in more than four years. “Inflation is projected to remain in the range of 3.5 to 3.9 per cent through 2025, though supply shocks may cause temporary spikes,” the RBI said.
