India's retail inflation rises to 4.82% in August from 4.45% in July; food inflation hits 5.95%

India’s retail inflation accelerated to 4.82% in August from 4.45% in July, according to government data released on Monday.

Food inflation, measured by the Consumer Food Price Index, rose to 5.95% in August from 5.52% in July.

Inflation in rural areas stood at 5.23% in August, while urban inflation was lower at 4.31%.

The August figures are based on a new CPI series with 2024 as the base year,.

Food prices were the main source of inflationary pressure, with combined inflation for food and beverages at 5.66%.

Item-wise basis

Onion prices rose 48.27% year-on-year in August, compared with 22.54% in July.

Garlic inflation accelerated to 43.60% from 35.36%, while ginger prices rose 73.82%, although that was lower than July's 83.57%.

Silver jewellery prices surged 107.11% year-on-year, while gold, diamond and platinum jewellery inflation rose to 35.53%.

Tomato prices fell 31.09% year-on-year in August, while potato prices declined 13.14%.

Inflation in transport services for goods was 14.64%, while operation of personal transport equipment rose 7.40%.

Restaurant and accommodation services recorded combined inflation of 8.38%, while education services inflation was 3.73%.

The Reserve Bank has projected the CPI inflation for 2026-27 at 5%, with Q2 at 4.7%, Q3 at 5.9%, and Q4 at 5.5%.

The central bank targets retail inflation at 4%, with a tolerance band of 2%-6%.

Wholesale inflation in August

Wholesale price-based inflation inched up to 9.92% in August from 9.78% in July, mainly due to rising prices of food, fuel and manufactured items.

The August inflation print is the second highest in the new WPI series with 2022-23 as the base year.

"Across groups, mineral oils (containing petroleum products), food articles, manufacture of food products, manufacture of basic metals, non-food articles, and manufacture of chemicals and chemical products have been major drivers of WPI inflation in August 2026," the Commerce and Industry Ministry said while releasing the WPI data.

Barclays, in a research note, said the resurgence in fuel and power inflation was led by rises in mineral oils and natural gas & petroleum WPIs (due to an increase in international energy prices).

India Ratings and Research Chief Economist Devendra Pant said the prolonged West Asia crisis has reversed two months’ declining trend in fuel and power inflation and is likely to remain elevated until the crisis is resolved.

"With the West Asia crisis remaining unresolved (similar to Russia-Ukraine), global uncertainty is likely to remain elevated in the near term. This, along with deficient rain and weaker currency, would continue to push inflation higher in the near term," Pant said.