India's retail inflation rose to 5.54% in September 2026 from 4.83% in August, according to Consumer Price Index (CPI) data released by the Ministry of Statistics and Programme Implementation (MoSPI) on 12 October. Retail inflation measures how much the prices of a typical basket of household goods and services have changed compared with the same month a year earlier. The index now uses 2024 as its base year.
Food drove the increase
Food inflation, measured by the Consumer Food Price Index, rose to 7.74% from 5.97% in August. Onions showed the sharpest jump: prices were 108.09% higher than a year earlier, compared with 48.78% in August. Ginger (62.85%), garlic (54.62%) and lemons (36.41%) also rose steeply. Some vegetables became cheaper over the year, including potatoes (down 11.50%) and tomatoes (down 8.62%).
Outside food, prices for restaurants and accommodation rose 9.36%, transport 5.01%, and housing, water, electricity, gas and other fuels 2.74%. Health services inflation was 1.40%. Silver jewellery was up 87.80% over the year.
Rural inflation higher than urban
Rural inflation was 6.08% in September, up from 5.24% in August, while urban inflation was 4.88%, up from 4.31%. Food inflation was 8.06% in rural areas and 7.18% in urban areas. Among states, Tamil Nadu recorded the highest rate at 6.81%, followed by Odisha (6.70%) and Madhya Pradesh (6.68%). Delhi was at 3.40%.
Link to interest rates
The data come days after the Reserve Bank of India's Monetary Policy Committee raised the repo rate by 25 basis points to 5.50% on 7 October and changed its stance to "calibrated tightening". The repo rate is the rate at which the RBI lends to banks, and changes in it feed through to loan and deposit rates; one basis point is one-hundredth of a percentage point. In its policy resolution, the RBI projected CPI inflation at 5.2% for 2026-27, with quarterly estimates of 4.9% for July to September, 6.0% for October to December and 5.7% for January to March.
The next CPI release, covering October 2026, is scheduled for 12 November.
What the number means for households
An inflation rate of 5.54% means that, on average, a basket of goods and services that cost ₹100 in September 2025 cost about ₹105.54 in September 2026. Money kept in savings that earn less than the inflation rate loses purchasing power over time, while a rise in the general price level also shows up in everyday costs such as groceries, travel and eating out.