New Delhi: India's retail inflation may have risen to 5.47 per cent in September from 4.82 per cent in August, driven by a sharp increase in food prices, according to a report by Union Bank of India released this week. The projected figure would mark the highest headline inflation since December 2024 and take it well above the Reserve Bank of India's 4 per cent medium-term target.
The report estimates that food inflation accelerated to 7.35 per cent in September from 5.66 per cent in August, with vegetables accounting for a significant share of the increase. Vegetable inflation is projected to have jumped to 9.34 per cent in September from just 0.99 per cent a month earlier, with onion prices rising around 34 per cent during the month, according to data cited in the report from the Department of Consumer Affairs.
Broadening price pressures
The pressure is spreading beyond vegetables. The report expects cereal inflation to rise to 3.75 per cent in September from 2.82 per cent in August, while pulses inflation may increase to 4.19 per cent from 3.06 per cent. Prices of sugar, edible oils and milk also remained firm, the report said.
Union Bank attributes the expected increase to prolonged supply disruptions, higher energy costs, rising global chip prices and the effects of a possible Super El Nino weather phenomenon. "Food inflation has travelled quick and far and has become sticky from 2.12% in Jan'26 to 5.66% in August'26," the report noted.
Weather adds to the worry
Weather conditions could add to the pressure on food prices. The southwest monsoon ended the June-September 2026 season with rainfall 13 per cent below the long-period average, while reservoir levels stood at 72 per cent, compared with 92 per cent a year earlier. Total kharif crop sowing was around 1 per cent lower than the previous year, with paddy sowing down nearly 3 per cent.
The projection comes just days after the RBI raised its policy repo rate by 25 basis points to 5.50 per cent on October 7, its first hike in nearly four years. The official September CPI data from the National Statistics Office is awaited and will confirm whether the projection holds.
Sources:
India's retail inflation may rise to 5.47% in September as food prices climb: UBI — The Tribune (ANI)
India's Retail Inflation May Rise To 5.47% On Food Prices — TradingView
The report estimates that food inflation accelerated to 7.35 per cent in September from 5.66 per cent in August, with vegetables accounting for a significant share of the increase. Vegetable inflation is projected to have jumped to 9.34 per cent in September from just 0.99 per cent a month earlier, with onion prices rising around 34 per cent during the month, according to data cited in the report from the Department of Consumer Affairs.
Broadening price pressures
The pressure is spreading beyond vegetables. The report expects cereal inflation to rise to 3.75 per cent in September from 2.82 per cent in August, while pulses inflation may increase to 4.19 per cent from 3.06 per cent. Prices of sugar, edible oils and milk also remained firm, the report said.
Union Bank attributes the expected increase to prolonged supply disruptions, higher energy costs, rising global chip prices and the effects of a possible Super El Nino weather phenomenon. "Food inflation has travelled quick and far and has become sticky from 2.12% in Jan'26 to 5.66% in August'26," the report noted.
Weather adds to the worry
Weather conditions could add to the pressure on food prices. The southwest monsoon ended the June-September 2026 season with rainfall 13 per cent below the long-period average, while reservoir levels stood at 72 per cent, compared with 92 per cent a year earlier. Total kharif crop sowing was around 1 per cent lower than the previous year, with paddy sowing down nearly 3 per cent.
The projection comes just days after the RBI raised its policy repo rate by 25 basis points to 5.50 per cent on October 7, its first hike in nearly four years. The official September CPI data from the National Statistics Office is awaited and will confirm whether the projection holds.
Sources:
India's retail inflation may rise to 5.47% in September as food prices climb: UBI — The Tribune (ANI)
India's Retail Inflation May Rise To 5.47% On Food Prices — TradingView
