During September, there was a significant increase in food prices in India. A particularly noticeable jump in prices was recorded for onions, sugar, vegetable oil, and rice. The rise in the cost of these goods is having a stronger impact on rural areas.
According to the monthly economic review for October, retail inflation based on the Consumer Price Index (CPI) increased to 5.54% in September 2026, which is 71 basis points higher than the previous month. Food consumer inflation reached 7.74%, intensifying financial pressure on households.
This growth was not uniform across all regions. In September, rural retail inflation stood at 6.08%, while in urban areas it was 4.88%. Regarding food inflation, it was 8.06% in rural areas, exceeding 7.18% in urban centers, indicating more intensive food consumption in villages.
Onion prices doubled, becoming one of the main drivers of food inflation. Sugar prices rose by 30%, and cane sugar by 23%. The review also noted that refined oil prices increased by 15%, peanut oil by 14%, and rice by 8%.
Price pressure was intensified due to supply-side issues. Stocks of last season's onions (rabi) are dwindling, and the arrival of the new harvest (kharif) has been delayed by about a month. Sugar prices were also pressured by reduced beet sugar production, heavy rains, and 'red rot' disease.
Furthermore, the price increase may be linked to increased demand before the festive season and a decline in global sugar supply. According to the review, rice prices are also under pressure due to growing international demand for Indian rice. Price increases are observed at both the retail and wholesale levels.
Wholesale price index inflation grew from 9.92% in August to 11.39% in September. Inflation in the fuel and electricity categories in the wholesale market increased to 25.85%, and in the industrial goods category to 9.76%.
If the current pressure persists, the combination of high food prices and rising wholesale costs could create a complex inflationary situation. The review showed that food inflation continued to rise in September, while the global food price index was 5.8% higher compared to the previous year.
The main concern for the public is the increase in the prices of essential goods. The rapid rise in inflation in villages indicates that households residing in rural India are facing more serious difficulties in covering living expenses compared to urban residents.