The National Statistics Office released provisional data on Monday showing India’s year‑on‑year retail inflation at 5.54% in September 2026, the highest rate of the year and a sharp rise from 4.83% in August. Food‑price inflation surged to 7.74%, with onions spiking 108.09% from 48.78% in August, while garlic and lemon rose 54.62% and 36.41% respectively. Rural inflation edged higher at 6.08% compared with urban 4.88%. The Ministry of Statistics confirmed the figures during a press briefing.
The RBI’s Monetary Policy Committee met on 27 September and raised the benchmark repo rate by 25 basis points to 5.50%, a move aimed at curbing the recent inflationary pressure. Garima Kapoor, deputy head of research at Elara Capital, told NDTV that while two more hikes were expected this financial year, market conditions could force a pause if commodity prices ease. "The RBI will remain firmly on a path of rate hikes as long as food and energy prices stay sticky," Kapoor added.
State‑level data reveal significant regional disparities: Tamil Nadu recorded 6.81% inflation, followed by Odisha at 6.70% and Madhya Pradesh at 6.68%. Nirav Karkera, head of research at W‑by‑Groww, warned that although a softer base might delay the headline’s reflection of lower rates, the central bank could still tighten policy if vegetable prices remain high. "The outcome will hinge on kharif yields, government action on vegetable prices, and a stable rupee," Karkera said.
Across Delhi’s markets, veteran street vendor Rajesh Kumar says onions have become a luxury, with a kilogram now costing ₹250, up from ₹120 a month earlier. He fears that continued price hikes will erode the purchasing power of low‑income households, pushing them into deeper debt. The RBI’s next policy meeting, slated for early October, will determine whether a third rate increase is warranted or a pause is necessary to monitor the impact of current inflationary trends.