June retail inflation climbs to 4.38%, breaches RBI's 4% target after 17 months
The latest reading marks the first time in 17 months that headline inflation has crossed the RBI's 4% target. Retail inflation had eased to 2.74% in January before gradually rising to 3.21% in February, 3.40% in March, 3.48% in April and 3.93% in May.
India's retail inflation accelerated to 4.38% in June from 3.93% in May, breaching the Reserve Bank of India's (RBI) medium-term target of 4% for the first time in 17 months, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.
The Consumer Price Index (CPI)-based inflation print remained within the RBI's tolerance band of 2%-6%, but marked a sharp increase from the previous month amid a rise in food prices.
Food inflation, measured by the Consumer Food Price Index (CFPI), rose to 5.32% in June from 4.78% in May. Rural food inflation stood at 5.45%, while urban food inflation was recorded at 5.09%.
At the headline level, rural inflation increased to 4.74% in June from 4.25% in May, while urban inflation rose to 3.92% from 3.53%.
The latest reading marks the first time since January 2026 that headline inflation has crossed the RBI's 4% target. Retail inflation had eased to 2.74% in January before gradually rising to 3.21% in February, 3.40% in March, 3.48% in April and 3.93% in May.
Among major expenditure categories, food and beverages inflation stood at 5.05% in June, transport inflation at 4.31%, education services inflation at 3.34%, and restaurants and accommodation services inflation at 6.91%. Personal care, social protection and miscellaneous goods and services recorded inflation of 16.72%.
Housing inflation was recorded at 2.10% in June. The corresponding inflation rates for rural and urban areas were 2.66% and 1.90%, respectively.
Data showed that some food items continued to witness sharp price increases. Ginger inflation surged to 50.41% in June from 32.50% in May, while tomato inflation stood at 31.92%. Raisins and monacca recorded inflation of 20.52%.
Precious metals also remained a major contributor to inflationary pressures. Inflation in silver jewellery stood at 133.21%, while gold, diamond and platinum jewellery registered inflation of 36.82%.
On the other hand, potato prices remained significantly lower on a year-on-year basis, with inflation at -20.34%. Peas recorded inflation of -9.67%, while motor cars and jeeps, cumin and motorcycles/scooters also remained in deflationary territory.
Among states and Union Territories, Telangana recorded the highest retail inflation among states with a population exceeding 50 lakh at 6.36%, followed by Andhra Pradesh and Puducherry at 5.39% each. Tamil Nadu recorded inflation of 5.24%, while Odisha posted 5.15%.
Delhi continued to report among the lowest inflation rates in the country, with retail inflation at 2.96%.
The inflation data will be closely watched by policymakers and markets after the RBI delivered a cumulative 100-basis-point reduction in the repo rate during the first half of the year, citing moderating inflation and the need to support growth.