Inflation cooled to 1.54 percent in September, the lowest reading in more than eight years, easing from a two-month high of 2.07 percent in August, data released by the government on October 13 shows.

"The CPI inflation eased to a 99-month low 1.5 percent in September 2025, pulled down by a sharper than anticipated disinflation in food and beverages to 1.4% (81-month low), despite several other categories recording a sequential uptick in YoY inflation prints. For instance, inflation for miscellaneous items shot up to 5.35 percent in September 2025, boosted by the surge in prices of gold and silver," said Aditi Nayar, chief economist, Icra.

This is the second time in 2025 that consumer price growth has stayed below 2 percent, marking a continuation of the disinflationary trend seen through the year. In August, inflation dipped to an eight-year low of 1.61 percent, driven by a fall in food and fuel prices.

The food basket in September slipped further into deflation with a reading of -2.28 percent, lowest level in over eight years, as vegetables and pulses remained in deflation at -21.4 percent and -15.3 percent, respectively, for an eighth consecutive month.