India’s price-rise heat is back; retail inflation seen nearing 5%
Food prices firm up; rising global crude oil prices seen adding further pressure
- Sep 9, 2026,
- Updated Sep 9, 2026 7:17 PM IST
Retail inflation is likely to have accelerated to close to 5% in August, as pricier food items weighed on household budgets. Rising global crude oil prices are also expected to put pressure on imports and stoke inflationary concerns.
Consumer price index-based inflation was at a 19-month high of 4.45% in July. Official estimates of retail inflation for September will be released on September 14.
Most economists expect retail inflation in September to hit a 20-month high of 4.8%, breaching the Reserve Bank of India’s comfort level of 4% for a third straight month.
The Bank of Baroda Essential Commodities Index (BoB ECI) rose 4.8% year-on-year and 1.7% sequentially in August 2026. “Among 20 items, 15 witnessed an increase in inflation rate,” a Bank of Baroda report said on Wednesday.
While sugar registered the sharpest increase, onion prices also saw an uptick. “Some components of pulses, such as tur and urad, also rose at a modest pace. Vanaspati, soya and sunflower oil within edible oils also rose a tad bit,” the report noted.
According to Crisil’s Roti Rice Plate report, the cost of home-cooked vegetarian and non-vegetarian thalis rose 1% and 5% year-on-year, respectively, in August. “Elevated prices of onion, vegetable oil, rice and liquefied petroleum gas (LPG) kept thali costs high despite a decline in potato and tomato prices,” it said.
Pushan Sharma, Director, Crisil Intelligence, said onion prices are expected to remain firm over the next 2-3 months due to tight rabi supplies and delayed kharif arrivals. Potato prices may stay broadly stable, while tomato prices are likely to remain benign.
“Elevated crude oil prices are exerting pressure on freight and landed costs of imports, while higher polymer and resin prices keep packaging costs high,” he further noted.
With the West Asia conflict intensifying, Brent crude oil prices once again crossed $100 per barrel on Wednesday, raising concerns about their impact on growth and inflation.
Rajeev Sharan, Head of Research, Brickwork Ratings, noted that costlier crude will squeeze margins in oil-sensitive sectors such as aviation, paints, tyres, chemicals, logistics and parts of FMCG. “For India, higher crude means costlier imports, a wider trade gap and a softer rupee, leaving the RBI little room to cut rates at its October 7 review,” he said.
In September, the average cost of the Indian basket of crude oil rose to $102.11 per barrel from $90.19 in August.
Retail inflation is likely to have accelerated to close to 5% in August, as pricier food items weighed on household budgets. Rising global crude oil prices are also expected to put pressure on imports and stoke inflationary concerns.
Consumer price index-based inflation was at a 19-month high of 4.45% in July. Official estimates of retail inflation for September will be released on September 14.
Most economists expect retail inflation in September to hit a 20-month high of 4.8%, breaching the Reserve Bank of India’s comfort level of 4% for a third straight month.
The Bank of Baroda Essential Commodities Index (BoB ECI) rose 4.8% year-on-year and 1.7% sequentially in August 2026. “Among 20 items, 15 witnessed an increase in inflation rate,” a Bank of Baroda report said on Wednesday.
While sugar registered the sharpest increase, onion prices also saw an uptick. “Some components of pulses, such as tur and urad, also rose at a modest pace. Vanaspati, soya and sunflower oil within edible oils also rose a tad bit,” the report noted.
According to Crisil’s Roti Rice Plate report, the cost of home-cooked vegetarian and non-vegetarian thalis rose 1% and 5% year-on-year, respectively, in August. “Elevated prices of onion, vegetable oil, rice and liquefied petroleum gas (LPG) kept thali costs high despite a decline in potato and tomato prices,” it said.
Pushan Sharma, Director, Crisil Intelligence, said onion prices are expected to remain firm over the next 2-3 months due to tight rabi supplies and delayed kharif arrivals. Potato prices may stay broadly stable, while tomato prices are likely to remain benign.
“Elevated crude oil prices are exerting pressure on freight and landed costs of imports, while higher polymer and resin prices keep packaging costs high,” he further noted.
With the West Asia conflict intensifying, Brent crude oil prices once again crossed $100 per barrel on Wednesday, raising concerns about their impact on growth and inflation.
Rajeev Sharan, Head of Research, Brickwork Ratings, noted that costlier crude will squeeze margins in oil-sensitive sectors such as aviation, paints, tyres, chemicals, logistics and parts of FMCG. “For India, higher crude means costlier imports, a wider trade gap and a softer rupee, leaving the RBI little room to cut rates at its October 7 review,” he said.
In September, the average cost of the Indian basket of crude oil rose to $102.11 per barrel from $90.19 in August.