This resulted in 2QFY27 inflation at 4.9 per cent, in line with RBI’s forecast.
Food inflation recorded a 21-month high growth of 7.74 per cent year on year in September, when compared to 5.97 per cent in August and 5.52 per cent in July.
Items of mass consumption like ginger, garlic and lemon recorded high double-digit growth, while onion recorded triple digit growth, Dr. Devendra Pant, Chief Economist, India Ratings and Research, said.
Rise in food inflation was due to a combination of seasonal increase in food inflation, adverse base effect (food inflation in September 2025 was (-)2.33per cent) and El Nino, he said.
Fuel impact was evident on user groups – transport prices increased 5 per cent (August 2026: 4.6 per cent; July 2026: 4.44 per cent), while restaurant & accommodation services grew 9.36 per cent (August 2026: 8.38 per cent; July: 7.72 per cent) underlining the impact of the ongoing West Asia conflict on commercial liquified petroleum gas, Pant said.
Overall, 11/12 sub-groups recorded an increase in inflation except personal care group, indicating generalization of inflation, he noted.
Adverse base effect of food inflation in October 2025 (-5.0%) could push food inflation in October 2026 to 9.1 per cent. Headline inflation in October 2026 is expected to be around 6 per cent, adverse base effect will also play its role in higher inflation (headline inflation in October 2025: 0.0 per cent, September 2025: 1.4 per cent), India Ratings said.
Oil prices remaining above USD100/bbl, below normal rainfall and adverse base continue to be key risks to the inflation in coming months. However, the recent move by the RBI has resulted in appreciation of Rupee vis-à-vis USD (1 per cent appreciation on 12 October 2026) is likely to provide some relief on imported inflation, it said.