CareEdge Ratings has reported that India’s CPI inflation eased further to 1.6% in July 2025, driven largely by a deepening deflation in the food category. Core inflation also moderated to 4.1% from 4.4% in June, supported by reduced price pressures in transport, communication, and education. The food and beverages index contracted by 0.8% year-on-year, led by steep declines in vegetables (-20.7%), pulses (-13.8%), spices (-3.1%), and meat (-0.6%). However, edible oils (+19.2%) and fruits (+14.4%) continued to post double-digit inflation. CareEdge highlighted that edible oil prices remain a concern due to import dependence and lower kharif oilseed sowing, despite recent cuts in customs duty on imports. Strong monsoon progress, healthy reservoir levels, and robust kharif sowing, particularly in cereals, are expected to support food price stability going forward. On the external front, global commodity prices remain largely stable, though geopolitical tensions could trigger volatility. CareEdge projects average CPI inflation at 3.1% for FY26, with a likely rise in inflationary momentum in the second half of the fiscal year as base effects fade. No further rate cuts are anticipated unless there is a significant slowdown in economic growth. Full Report:CPI_Inflation_-_July_2025