India's Inflation Sees Sharp Dip to 2.10% in June 2025: Lowest Since January 2019

In June 2025, Inflation in India took a remarkable turn, with both headline and food inflation rates dropping sharply across rural and urban sectors. This development has brought the country’s inflation to its lowest levels in over 6 years

CPI Inflation Falls to 2.10%

The year-on-year inflation rate based on the All-India Consumer Price Index (CPI) for June 2025 was recorded at 2.10% (provisional) compared to the same month last year. This represents a significant decline of 72 basis points compared to May 2025. Such a low inflation figure has not been seen since January 2019, signalling a period of easing price pressures in the economy.

Food Inflation Turns Negative

June 2025 inflation data saw a sharp decline in food inflation. The Consumer Food Price Index (CFPI) showed a year-on-year deflation of -1.06%, marking a fall of 205 basis points from May 2025. This is the lowest food inflation rate recorded since January 2019. Breaking it down further, rural areas saw food inflation at -0.92%, while urban areas experienced even greater deflation at -1.22%.

The widespread drop in food prices is likely driven by factors such as improved supply conditions and favourable harvests, providing relief to consumers who spend a significant portion of their income on food.

Rural Inflation Trends

In rural India, the inflation story reflects a notable easing in both headline and food prices. Headline CPI inflation dropped to 1.72% in June 2025 from 2.59% in May 2025, indicating slowing general price increases in rural markets. Meanwhile, food inflation in rural areas also turned negative, with the CFPI recording -0.92% in June compared to a positive 0.95% in May.

This sharp fall in food prices in rural regions may be attributed to better agricultural output and supply chain improvements. This decline can have a positive impact on rural household budgets, many of which are highly sensitive to food price fluctuations.

Urban Inflation Trends

Urban India saw a similar cooling effect in inflation during June 2025. The headline CPI inflation eased from 3.12% in May to 2.56% in June. Urban food inflation saw an even more dramatic drop, moving from 1.01% to -1.22%. This significant reduction suggests that urban consumers are benefiting from falling prices of essential food items and groceries.

Factors like improved logistics, reduced demand-pull inflation, and favourable commodity prices could be contributing to this downward trend. Lower food inflation in urban centers is especially important as it tends to influence overall consumer sentiment and spending.

Wholesale Price Index (WPI) Records Negative Inflation

The wholesale price front also mirrored these trends with the All India Wholesale Price Index (WPI) registering a deflation of -0.13% in June 2025 compared to the same month last year. This negative inflation rate is largely due to price decreases in key sectors such as food articles, mineral oils, basic metals, crude petroleum, and natural gas.

Also Read: Where Farmers, Small Businesses Can Avail RBI's Gold, Silver-Collateral Loans? 

Conclusion

June 2025’s inflation data highlights a significant shift towards moderation in India’s price environment. Both retail and wholesale price indices show cooling inflation, with food prices even turning negative in several areas. This easing of inflation provides some relief to consumers and can ease the burden on policymakers focused on maintaining price stability.