Domestically, consumer price inflation (CPI) eased to 1.7 per cent in FY26 down from 4.9 per cent in FY25, marking a multi-year low. The decline was driven primarily by a sharp correction in food prices, especially vegetables, pulses and spices, supported by “favourable” agricultural conditions, improved supply management and calibrated government interventions
India’s inflation landscape has turned decisively benign, with retail inflation following a sharp downward trajectory in FY26, led by a steep fall in food prices and timely policy interventions, the Economic Survey 2025–26 said.
Domestically, consumer price inflation (CPI) eased to 1.7 per cent in FY26 down from 4.9 per cent in FY25, marking a multi-year low. The decline was driven primarily by a sharp correction in food prices, especially vegetables, pulses and spices, supported by “favourable” agricultural conditions, improved supply management and calibrated government interventions.
“Headline CPI inflation declined to 1.7 per cent, driven primarily by corrections in vegetable and pulse prices, supported by favourable farm conditions, supply-side interventions, and a strong base effect,” the survey said.
According to the survey, the sustained softening of food inflation has played a decisive role in pulling down headline inflation, reinforcing the importance of supply-side measures in maintaining price stability.
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