India’s retail inflation accelerated to 4.45% year-on-year in July 2026, from 4.38% in June, marking the second consecutive month above the Reserve Bank of India’s 4% medium-term target. The reading nevertheless remains within the RBI’s 2%-6% tolerance band.
Food inflation increased more sharply, reaching 5.52% from 5.32% in June. The new number arrives just a week after the RBI Monetary Policy Committee unanimously left the repo rate unchanged at 5.25% and retained its neutral policy stance.
India inflation dashboard: July 2026
| Indicator | June 2026 | July 2026 | Change / status |
|---|---|---|---|
| Headline CPI inflation | 4.38% | 4.45% | +0.07 percentage point |
| Food inflation | 5.32% | 5.52% | +0.20 percentage point |
| Transport inflation | 4.31% | 4.43% | +0.12 percentage point |
| RBI medium-term target | — | 4.0% | CPI above target |
| RBI tolerance band | — | 2%-6% | CPI remains within band |
| RBI repo rate | — | 5.25% | Unchanged on 5 August |
| RBI FY2026-27 inflation projection | — | 5.0% | RBI forecast |
| RBI Q2 FY27 projection | — | 4.7% | Forecast |
| RBI Q3 FY27 projection | — | 5.9% | Forecast |
| RBI Q4 FY27 projection | — | 5.5% | Forecast |
| Estimated core inflation | — | 3.9% | Analyst calculation, not official CPI series |
The 3.9% core figure is from India Ratings and Research as reported by Reuters. India does not publish an official core CPI series, so it should not be presented alongside MoSPI headline inflation without that qualification.
The RBI projections and repo rate are from its August monetary-policy resolution.
The Run
The central development is the move from 4.38% to 4.45% headline inflation, but food prices show the greater acceleration. Food CPI increased by 0.20 percentage point between June and July, compared with a 0.07-point rise in overall inflation.
The food increase particularly to higher prices for ginger, garlic and onions, partly offset by lower tomato prices. Transport inflation also increased to 4.43%.
The RBI had already anticipated a near-term rise in inflation. Its August policy statement projects headline CPI at 5.9% during Q3 FY2026-27, before moderating to 5.5% in Q4, while stressing that recent inflation pressure has largely arisen from food and fuel rather than broad-based demand.
RBI rate outlook: actual decision versus forecasts
The MPC kept the repo rate at 5.25% on 5 August 2026.
Economists and market experts argue that the RBI could remain on hold in October and potentially raise rates later if inflation becomes persistent.
A 4.45% CPI reading does not by itself establish that a December increase will occur.
Nine145 data read
India’s inflation story has shifted markedly from the unusually soft readings seen earlier in the cycle towards a new phase dominated by food and fuel supply pressure.
For the RBI, three numbers now deserve to be read together:
4.45% current inflation → 5.25% repo rate → 5.9% RBI Q3 inflation projection.
The first remains inside the statutory tolerance band; the second shows that monetary policy is currently on hold; the third indicates that the RBI itself expects inflation to rise further before easing.
That makes the next few CPI releases more important than attempting to infer an inevitable rate move from today’s number alone.