India's Consumer Price Index inflation accelerated to 5.5% YoY in September 2026 from 4.8% in Aug'26, driven by a surge in food prices and an increase in select core components. Food inflation rose to 7.7% in Sep'26 from 6.0% in Aug'26, while core inflation edged up to 4.3% from 4.2%, indicating broadening of price pressures. The acceleration was also reflected in transport, clothing and footwear, household goods, and restaurant and accommodation services. With headline inflation remaining above the RBI's 4% target for a fourth consecutive month, the September print reinforces upside risks to the inflation outlook.
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Motilal Oswal Report
India's Consumer Price Index inflation accelerated to 5.5% YoY in September 2026 from 4.8% in Aug'26, driven by a surge in food prices and an increase in select core components.
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Food inflation rose to 7.7% in Sep'26 from 6.0% in Aug'26, while core inflation edged up to 4.3% from 4.2%, indicating broadening of price pressures. The acceleration was also reflected in transport, clothing and footwear, household goods, and restaurant and accommodation services.
With headline inflation remaining above the RBI's 4% target for a fourth consecutive month, the September print reinforces upside risks to the inflation outlook.
Food inflation remained the principal driver of headline CPI in Sep'26, driven by a surge in vegetable prices and broadbased pressures across the food basket. Within vegetables, onion inflation more than doubled in Sep'26 vs. Aug'26, while garlic and lemon inflation also increased.
Ginger inflation remained elevated, although it moderated from the previous month. Meanwhile, potato and tomato prices continued to decline, although the pace of deflation moderated.
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Beyond vegetables, pulses inflation increased, while edible oils, cereals, sugar, milk, fruits and nuts, and ready-made food also recorded an increase in prices. Global food prices have shown signs of firming, with wheat prices rising amid logistical constraints in the Black Sea region and maize prices increasing due to lower-than-expected US yields and reduced export availability from Brazil.
Edible oil prices have also accelerated, led by higher palm oil prices. Below-normal reservoir storage, strengthening El Niño conditions, and higher global food prices could keep food prices elevated in the coming months.
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