India’s September Core Consumer Price Inflation Estimated at 4.5%, Economists Say

September 2025 Core Consumer Price Inflation Estimated at 4.5%

India’s core consumer price inflation (CPI), which excludes volatile food and fuel costs, is projected by economists to hover around 4.5% in September 2025. This comes as headline inflation remains subdued at 1.54%, driven by a continued drop in food prices. The persistence of moderate core inflation suggests underlying price pressures in the economy, primarily from services and manufactured goods.

The Reserve Bank of India’s (RBI) monetary policy committee highlighted the favorable inflation backdrop in early October, signaling the possibility of sustained accommodative policy to foster economic growth while monitoring inflation risks carefully.

Notable Updates

September headline inflation fell to an eight-year low at 1.54%, supported by a 2.28% deflation in food prices, especially vegetables like tomatoes, onions, and potatoes.

Core inflation is steadier at an estimated 4.5%, up slightly from the 4.2-4.3% levels seen in recent months, reflecting stickier price pressures in the non-food sector.

Fuel and light inflation moderated to 1.98%, easing pressures further on overall consumer prices.

Economists note that the base effects which helped keep inflation low earlier in 2025 are starting to fade, but subdued food prices continue to hold down headline numbers.

RBI projects average inflation at 2.6% for FY26, lower than earlier estimates, citing GST rationalization, improved supply chains, and food price moderation.

Major Takeaways

Core inflation at 4.5% signals moderate underlying demand-side inflation but remains within manageable levels for monetary policy.

Food price deflation remains a key factor restraining overall inflation, providing room for RBI to maintain supportive growth policies.

Watchful eye remains on geopolitical developments and external tariffs which may pose upside risks to price stability.

The gradual rise in core inflation underscores the balance RBI seeks between controlling prices and encouraging growth, with inflation risks evenly balanced.

The data depicts a cautiously optimistic inflation landscape for India, with core inflation steady and headline prices benign, leaving policymakers room to navigate economic recovery with prudence.

Sources: Ministry of Statistics and Programme Implementation (MOSPI), Economic Times, Reuters, RBI.