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India’s retail inflation rose to an eigth-month high of 4.82% in August 2026 from 4.45% in July, as food inflation picked up and price pressures increased across rural and urban areas, according to provisional data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.
The Consumer Price Index (CPI) reading was the highest so far this year, extending a steady rise from 2.74 % in January, according to the ministry’s series with 2024 as the base year.
Food inflation accelerates
Food inflation accelerated to 5.95% in August from 5.52% in July. Rural food inflation increased to 6.13% from 5.79%, while the urban rate climbed to 5.64% from 5.05%.
Among individual food items, onion inflation jumped to 48.27% from 22.54 % in July, while garlic inflation rose to 43.60% from 35.36%. Ginger prices were 73.82% higher than a year earlier, although the pace eased from July.
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However, some vegetables remained cheaper than a year ago. Tomato prices fell 31.09% year-on-year, while potato prices declined 13.14%.
Overall rural inflation rose to 5.23% from 4.84%, while urban inflation increased to 4.31% from 3.96%.
Rising prices complicate RBI’s policy choices
Dr Manoranjan Sharma, Chief Economist, Infomerics Valuation and Rating Limited, said the inflation trajectory was making the RBI’s policy choices more difficult. “India’s August retail inflation of 4.82%—up from 4.45% in July—marks a third consecutive reading above the RBI’s 4% medium-term target. This shows that price pressures have become entrenched rather than a one-month aberration, making the RBI’s policy trade-off difficult.”
Highlighting the impact on household budgets, Sharma further said, “The sharper rise in food inflation to 5.95%, from 5.52% in July, is worrisome since food has a large weight in household consumption, especially for poorer and rural households, so the headline number understates the loss of purchasing power faced by those whose expenditure is concentrated in essentials.”
Beyond food, silver jewellery prices were up 107.11% year-on-year. Inflation in restaurants and accommodation services stood at 8.38%, while transport inflation was 4.60%.
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Sharma also cautioned against treating the increase as an automatic case for raising interest rates. “Although 4.82% is within the RBI’s statutory 2-6% tolerance band, the uneasy mix of accelerating food prices and prior evidence of firming core inflation narrows room for monetary easing; policy must distinguish temporary weather- and supply-driven food shocks from broader demand and fuel-cost spillovers before treating the rise as a case for higher interest rates,” he added.
Telangana records highest inflation among states
Among states, Telangana recorded inflation of 6.27%, followed by Tamil Nadu at 5.92%. Mizoram’s rate was 2.35%.
The all-India CPI increased to 108.74 in August from 107.95 in July. August figures are provisional, while July readings are final, MoSPI said.
TOPICSCPI InflationECONOMYfood inflationinflationRetail inflation + 0 MoreThis article was first uploaded on September fourteen, twenty twenty-six, at twenty-six minutes past four in the afternoon. © IE Online Media Services (P) Ltd