Retail inflation based of CPI jumps to 4.82% in August amid higher food prices
Retail inflation, measured by the All India Consumer Price Index (CPI) with the base year 2024, rose to 4.82% (Provisional) in August 2026 from 4.45% (Final) in July 2026, largely driven by higher food prices. August inflation numbers are the highest since the new series, with base year 2024, took effect in January. The CPI reading remained above the Reserve Bank of India’s (RBI's) medium-term inflation target of 4%. RBI is mandated to maintain headline retail inflation at 4%, while allowing it to move within a tolerance band of 2% to 6%, for the five-year period from April 1, 2026, to March 31, 2031. Meanwhile, CPI inflation for Rural and Urban rose to 5.23% and 4.31% in August 2026, from 4.84% and 3.96% in July 2026, respectively. Moreover, the index value for CPI for rural, urban and combined stood at 109.27, 108.07 and 108.74, respectively, for the month of August 2026.
Food inflation, measured by the Consumer Food Price Index (CFPI), jumped to 5.95% (Provisional) for August 2026 as compared to 5.52% (Final) in July 2026. Corresponding inflation rates for rural and urban stood at 6.13% and 5.64%, respectively in August 2026, as compared to 5.79% and 5.05%, respectively in July 2026. Index value for CFPI for rural, urban and combined stood at 110.70, 110.72 and 110.71, respectively, for August 2026.
Top five key items with high inflation at All India combined level in August 2026 were Silver Jewellery at 107.11% as against 109.89% in July 2026, Ginger at 73.82% in August 2026 as against 83.57% in July 2026, Onion at 48.27% in August 2026 as against 22.54% in July 2026, Garlic at 43.60% in August 2026 as against 35.36% in July 2026, and Gold/Diamond/Platinum Jewellery at 35.53% in August 2026 as against 32.98% in July 2026.
Top five key items with low inflation at All India combined level in August 2026 were Tomato at (-)31.09% as against (-)4.60% in July 2026, Potato at (-)13.14% in August 2026 as against (-)16.56% in July 2026, Motor car and jeep at (-)6.72% in August 2026 as against (-)6.72% in July 2026, Lady's finger at (-)5.41% in August 2026 as against (-)5.50% in July 2026, and Parwal/patal and Kundru at (-)3.60% in August 2026 as against (-)0.78% in July 2026.
Moreover, inflation in Food and beverages increased to 5.66% in August 2026 from 5.24% in July 2026, inflation in Transport rose to 4.60% in August 2026 from 4.43% in July 2026, inflation in Restaurants and accommodation services surged to 8.38% in August 2026 from 7.72% in July 2026, inflation in Clothing and footwear increased to 3.56% in August 2026 from 3.38% in July 2026. Also, inflation in Housing, water, electricity, gas and other fuels inched up to 2.61% in August 2026 from 2.16% in July 2026.
