Retail inflation touched 4.4% in June 2026, an 18-month high and the first time it has crossed the Reserve Bank of India’s 4% target since December 2024.
Inflation as measured by the new series of the Consumer Price Index (CPI) was driven by rising food and fuel prices amidst the impact of the crisis in West Asia as well as a weaker-than-normal monsoon.
“The June CPI inflation of 4.4%, exceeding the RBI’s medium-term target of 4%, reflects persistent inflationary pressures arising from global geopolitical uncertainties and supply chain disruptions,” Vivek Rathi, National Director of Research at Knight Frank India said.
“On the domestic front, food inflation has remained a key driver, due to weather-related disruptions to agricultural output, and uneven monsoon distribution across certain regions,” he added.
Food inflation marginally crossed the 5% mark in June 2026, the highest in the new series of the CPI.
Retail inflation touched 4.4% in June 2026, an 18-month high and the first time it has crossed the Reserve Bank of India’s 4% target since December 2024.
Inflation as measured by the new series of the Consumer Price Index (CPI) was driven by rising food and fuel prices amidst the impact of the crisis in West Asia as well as a weaker-than-normal monsoon.
“The June CPI inflation of 4.4%, exceeding the RBI’s medium-term target of 4%, reflects persistent inflationary pressures arising from global geopolitical uncertainties and supply chain disruptions,” Vivek Rathi, National Director of Research at Knight Frank India said.
“On the domestic front, food inflation has remained a key driver, due to weather-related disruptions to agricultural output, and uneven monsoon distribution across certain regions,” he added.
Food inflation marginally crossed the 5% mark in June 2026, the highest in the new series of the CPI.
Looking ahead, according to Aditi Nayar, Chief Economist at ICRA, retail food prices have continued to climb in July 2026 compared to both the previous month and July of last year, suggesting that the inflation in this segment is likely to be even higher in July 2026.
The transport segment of the CPI saw inflation rising to 4.3% in June 2026, compared to 1.7% in May, largely due to a rise in fuel prices as June was the first full month following the fuel price hikes implemented by the oil marketing companies.
“In addition to food items, the non-food component may also exert pressure on the headline CPI print in the month, partly owing to the passthrough of higher fuel prices into prices of other items,” she added.
The other area that witnessed high inflation was the ‘personal care, social protection and miscellaneous goods & services’ category, which saw inflation of 16.7% in June 2026, although this was the lowest since January 2026, the earliest period for which the new series has data.
Inflation in this segment was propelled by the rising prices of gold and silver in June, which was exacerbated by the higher import duties by the government on the two precious metals.
