Tamil Nadu has overtaken Telangana to become the state with the highest retail inflation at 6.81 per cent in September, ending Telangana's run at the top of the table in every month of calendar year 2026 so far. According to data from the Ministry of Statistics and Programme Implementation, Telangana slipped to fourth place at 6.64 per cent, even though its own inflation rose from 6.27 per cent in August to its highest level this year. Odisha moved into second place at 6.70 per cent from fifth in the previous month, followed by Madhya Pradesh at 6.68 per cent and Puducherry at 6.86 per cent. Tamil Nadu's combined (rural and urban) inflation rose from 5.91 per cent in August.
India's retail inflation climbed to 5.54% in September 2026, reaching its highest level since October 2024, with the latest reading bringing inflation closer to the Reserve Bank of India's upper tolerance limit of 6%. All-India retail inflation rose from 4.83 per cent in August, with inflation accelerating in 27 of the 28 states. Assam was the only exception, where it eased to 4.62 per cent from 4.83 per cent. September marked the highest inflation reading since the introduction of the new Consumer Price Index series with a 2024 base year, with the comparable historical measure at its highest level since late 2024. The increase was primarily a food-led shock rather than a broad acceleration across every major household category, with the broader food and beverages category recording inflation of 7.36%. SBI Research's Ecowrap report expects CPI inflation to peak at 6.7%-6.8% in November 2026, potentially adding further pressure on household budgets as Diwali approaches.
Tamil Nadu recorded the highest urban inflation at 6.53 per cent in September, up from 5.78 per cent in August, followed by Telangana at 6.21 per cent, Andhra Pradesh at 5.74 per cent, Madhya Pradesh at 5.72 per cent and Karnataka at 5.27 per cent. In rural areas, Madhya Pradesh led at 7.31 per cent, followed by Odisha at 7.24 per cent, Telangana at 7.21 per cent, Tamil Nadu at 7.17 per cent and Uttar Pradesh at 6.71 per cent. Rural inflation reached 6.08% in September 2026, compared with 4.88% in urban areas, with Rural households faced inflation above 6%, while urban consumers saw a smaller but still meaningful rise across food, restaurants, accommodation and personal services. Rural retail inflation rose to 6.08% from 5.24%, while urban retail inflation increased to 4.88% from 4.31%, with the rural-urban gap showing that rural households experienced a heavier increase in the cost of living, particularly through food.
Much of the rise in all-India inflation was driven by an increase in food prices, with analysis showing that food inflation in Tamil Nadu jumped to 10.62 per cent in September from 7.96 per cent in August, the highest among all states during the month. Andhra Pradesh followed at 10.18 per cent, making the two southern states the only ones with double-digit food inflation. All-India food inflation rose to 7.74 per cent in September from 5.97 per cent in the preceding month, with Onion prices seeing the sharpest increase, with inflation jumping to 108.09% from 48.78% a month earlier. Garlic and lemon inflation stood at 54.62% and 36.41%, respectively, while tomato and potato prices remained lower than a year earlier, although their rates of deflation narrowed. Rural food inflation reached 8.06 per cent, while urban food inflation was 7.18 per cent. Silver jewellery recorded the highest inflation among festive shopping categories at 87.8% in September 2026, though this was lower than 107.11% in August 2026, with vehicle prices recording negative inflation of 2.56%, indicating prices were lower than a year earlier.
Inflation in restaurants and accommodation services increased to 9.36% from 8.38% in August 2026, while transport inflation also moved higher, reaching 5.01% against 4.60% in the previous month. Core inflation, which excludes food and fuel, edged up to 4.6% from 4.4%, with prices rising across 11 of the 12 CPI divisions, with personal care being the only exception. Weak monsoon conditions and low reservoir replenishment have also raised concerns about rabi sowing and the availability of fresh crop supplies, adding to the inflationary pressures across multiple sectors. Inflation also increased across several other categories relevant to festive shopping, including household utensils (5.99%), furniture and home furnishings (4.43%), clothing (4.25%), and home repairs and maintenance (4.05%). Home appliances and festive-season electronics purchases recorded 3.26% inflation, while festive footwear saw 1.78% inflation.
India's wholesale inflation rose to 11.39% in September from 9.92% in August, led by sharp increases in fuel costs and higher food prices, according to provisional data released by the Ministry of Commerce and Industry. The overall WPI index rose to 112.5 in September from 110.8 in August, with the September reading being the highest among figures reported in the ministry's data for the preceding six months. Fuel and power recorded inflation of 25.85% in September, compared with 22.93% in August, with mineral oils increasing to 40.02% from 38.48%, while crude petroleum and natural gas climbed to 57.32% from 34.41%. Inflation in manufactured products accelerated to 9.76% from 8.37%, with basic metals recording 16.96% and chemicals rising to 16.74%. The WPI Food Index recorded inflation of 8.66%, up from 7.05% a month earlier, with the index for primary food articles increasing to 122.2 from 119.3 in August. Cumulative WPI inflation during April-September 2026 stood at 9.85%, compared with a decline of 0.20% during the corresponding period of the previous financial year.
