India Retail Inflation Rises To 4.45% In July As Food Prices Stay Elevated

India’s retail inflation continued its upward trend in July, rising to 4.45% compared with 4.38% in June, as persistent food price pressures pushed consumer prices higher.

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This was the fourth straight month of increase in headline inflation and the second consecutive month when inflation remained above the Reserve Bank of India’s 4% target.

Inflation has accelerated steadily since the beginning of the financial year, rising from 3.48% in April to 3.93% in May, 4.38% in June and 4.45% in July.

Food prices remain key inflation driver

Food prices remained the biggest contributor to the rise, with Consumer Food Price Index-based inflation increasing to 5.52% in July from 5.32% in the previous month.

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Rural India continued to face higher price pressures, with food inflation at 5.79%, compared with 5.05% in urban areas. Overall rural inflation rose to 4.84% in July from 4.74% in June, while urban inflation increased marginally to 3.96% from 3.93%.

The gap between rural and urban inflation was visible across several categories. Inflation in food and beverages stood at 5.53% in rural areas against 4.75% in cities. Clothing and footwear inflation was also higher in rural regions at 3.97%, compared with 2.41% in urban areas.

Spices, jewellery prices surge; vegetables offer relief

Several individual products witnessed sharp price increases during July. Ginger prices rose 83.62% year-on-year, compared with 50.41% in June, while garlic inflation climbed to 35.36% from 17.93%. Onion prices also saw a significant rise, with inflation increasing to 22.54% from 4.73%.

Precious metals continued to experience strong price gains. Silver jewellery prices surged 109.84% from a year earlier, while gold, diamond and platinum jewellery recorded inflation of 32.98%.

Services also contributed to price pressures, with restaurants and accommodation services recording inflation of 7.72% and transport services seeing inflation of 4.43%. Personal care, social protection and miscellaneous services recorded inflation of 14.77%.

However, some vegetables helped ease overall food inflation. Tomato prices declined 4.59% year-on-year in July after rising 31.92% in June. Potato prices fell 16.56%, while lady’s finger prices declined 5.52%.

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