Relief in inflation; July records an eight-year low at 1.55%.

India’s retail inflation fell to 1.55% in July, marking the lowest rate in the past eight years. However, unlike other states in the country, Kerala recorded the highest inflation rate at 8.89%.

The sharp drop in food prices was the main reason behind the overall decline. Vegetable prices fell by 20.69%, while pulses dropped by 13.76%. Although this trend benefits consumers, it has negatively impacted farmers’ incomes.

This is the first time since January 2019 that inflation has fallen below the Reserve Bank of India’s (RBI) 2–6% target range. Economists believe the decline is temporary, driven by volatile food prices, and therefore the RBI is unlikely to cut interest rates immediately.

While the country as a whole saw inflation ease, Kerala witnessed a steep rise, standing out from other states with its 8.89% rate. Inflation is expected to rise again to around 2.1% in August. Factors such as the new U.S. tariffs on Indian goods could also influence inflation in the coming months.