India's inflation hits 5.54% as onion prices more than double
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New Delhi: India's retail inflation surged to 5.54 per cent in September 2026, its highest level this year, as soaring food prices intensified the financial pressure on households, provisional data from the National Statistics Office (NSO) showed, NDTV report said.
Consumer Price Index (CPI)-based inflation climbed from 4.83 per cent in August, crossing the 5 per cent mark for the first time under the new CPI series. Food inflation jumped sharply to 7.74 per cent from 5.97 per cent, making essential groceries increasingly expensive.
Onion prices recorded a staggering annual inflation rate of 108.09 per cent, more than doubling from 48.78 per cent in August. Garlic inflation reached 54.62 per cent, while lemon prices rose 36.41 per cent, highlighting the mounting pressure on essential vegetables.
Rural households faced a heavier burden, with inflation reaching 6.08 per cent, compared with 4.88 per cent in urban areas. Tamil Nadu recorded the highest inflation among states with populations exceeding 50 lakh, at 6.81 per cent, followed by Odisha at 6.70 per cent and Madhya Pradesh at 6.68 per cent.
Transport, personal care and other goods and services also contributed to rising costs, threatening to further strain household budgets.
The inflation surge comes amid concerns over the Reserve Bank of India's monetary policy response. Economists at Elara Capital expect further repo rate hikes this financial year, citing persistent food and energy price pressures and rising global yields.
However, the inflation outlook will depend on kharif crop arrivals, government measures to rein in vegetable prices, crude oil prices and rupee stability. Persistent price pressures could keep borrowing costs elevated even as consumers struggle with the rising cost of living.