Cooling prices, uneven relief: Inflation at 12-year low, but gaps widen across states and rural India

India’s retail inflation fell to a 12-year low of 2.2% in 2025, with food prices slipping into deflation (-0.2%) for the first time since 2014.

However, the easing was uneven, with 17 states and union territories posting inflation above the national average.

Rural areas faced relatively higher pressure than urban, with Goa recording the widest rural-urban inflation gap. ANOUSHKA SAWHNEY takes a look:

States which registered highest and lowest inflation

• Kerala registered highest inflation in 2025
• Telangana (0.5%) and Bihar (1.1%) recorded the lowest

But, remained high in some regions-- 13 states/UTs reported higher rural inflation

RURAL INFLATION FELL BELOW URBAN IN 2025 (in %)

Retail & food: Average inflation

Categories that recorded highest inflation