India’s retail inflation rose to 5.54% in September 2026 from 4.83% in August, the highest reading of the year, MoSPI data showed on October 12. Food inflation jumped to 7.74%, led by a 108% rise in onion prices.
September 2026 CPI Inflation Numbers
The Ministry of Statistics and Programme Implementation released the figures on Monday, using the Consumer Price Index with 2024 as the base year. The September reading is provisional and can be revised.
Headline inflation rose by 71 basis points in a month. It has risen every month since January, when it stood at 2.74%. A Reuters poll had expected a reading of about 5.4%, so the actual number came in above forecasts.
| Measure | September 2026 | August 2026 |
| Headline CPI inflation | 5.54% | 4.83% |
| Food inflation (CFPI) | 7.74% | 5.97% |
| Rural inflation | 6.08% | 5.24% |
| Urban inflation | 4.88% | 4.31% |
| Rural food inflation | 8.06% | 6.17% |
| Urban food inflation | 7.18% | 5.64% |
Rural inflation outpaced urban inflation by 1.20 percentage points in September, up from a gap of 0.93 points in August. Food inflation was also 2.20 percentage points above headline inflation, since food rose by 1.77 points in the month while the headline figure rose by 0.71 points.
The combined CPI index stood at 109.49 for September, with the rural index at 110.11 and the urban index at 108.71. Prices were collected from 1,407 urban markets and 1,465 villages, and the ministry reported a 100% response rate in both rural and urban markets.
Which Food Items Became Costlier
Onion prices recorded the sharpest annual rise among key items. Onion inflation surged to 108.09% in September from 48.78% in August, which means prices more than doubled from a year earlier.
Other items also stayed elevated. Ginger inflation was 62.85%, down from 73.82% in August, while garlic inflation accelerated to 54.62% from 43.60%. Lemon prices rose 36.41%.
Some vegetables moved the other way. Potato prices fell 11.50% from a year earlier and tomato prices fell 8.62%. Lady’s finger prices were down 4.48% and coconut prices were down 3.99%.
Among non-food items, silver jewellery recorded inflation of 87.80% in September, down from 106.81% in August.
State and Category Breakdown
Among states with populations above 5 million, Tamil Nadu recorded the highest headline inflation at 6.81%. Odisha followed at 6.70%, then Madhya Pradesh at 6.68%, Telangana at 6.64% and Andhra Pradesh at 6.29%. Tamil Nadu also had the highest food inflation at 10.62%.
Other large states recorded the following headline inflation.
- Uttar Pradesh: 6.08%
- Karnataka: 5.86%
- Rajasthan: 5.71%
- Maharashtra: 5.18%
Among the major CPI divisions, personal care, social protection and miscellaneous goods and services recorded inflation of 13.75%. Restaurants and accommodation services stood at 9.36%, and food and beverages at 7.36%. Transport inflation was 5.01%, while education services stood at 3.94%, clothing and footwear at 3.93% and health at 1.40%.
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What the Data Means for RBI Policy
The inflation reading arrives days after the Reserve Bank of India raised its policy rate for the first time in nearly four years and moved to a stance of calibrated tightening. The central bank expects headline inflation of 5.2% and core inflation of 4.4% for the financial year ending March 2027, against its medium-term target of 4%, according to CNBC.
Analysts quoted by PTI before the release said a stronger reading could revive concerns over further RBI tightening, which would put rate-sensitive sectors such as banking, automobiles and real estate under pressure. They also said any relief from a softer print could prove short-lived while Brent crude stays above $100 a barrel.
Business Standard also reported on October 8 that inflation pressures were broadening, with 37% of the CPI basket rising above 4%, citing an RBI assessment. Elevated oil costs and pressure on the rupee form the backdrop to the new data.
At 5.54%, headline inflation is 1.54 percentage points above the RBI’s 4% medium-term target. It is also 0.14 percentage points above the 5.4% that the Reuters poll had pointed to, which is a modest miss for forecasters but a clear signal that food prices are carrying the increase.
The rural and urban split points the same way. Rural food inflation of 8.06% was higher than urban food inflation of 7.18%, and the rural headline series crossed 6% in September while the urban series stayed below 5%.
The next CPI release, covering October 2026, is scheduled for November 12.
