India’s retail inflation has dropped to a more than six-year low of 2.10% in June due to subdued prices of food items, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.

This has led to the speculation that the Reserve Bank of India (RBI) could go for an interest-rate cut in its August bi-monthly monetary policy. In the June policy, the RBI-led monetary policy committee (MPC) cut the benchmark repo rate by 50 basis points to 5.5%, making it the third reduction in a row this year. 

The Consumer Price Index-based inflation was 2.82% in May or a decline of 72 basis points in a month, and 5.08% in June 2024.

This marks the fifth consecutive month that Inflation has stayed below the RBI’s medium-term target of 4%.

“Year-on-year inflation rate based on CPI for the month of June 2025 over June 2024 is 2.1%, the National Statistics Office (NSO) said in a statement.

The headline inflation thus hit the lowest year-on-year rise since January 2019. 

The previous low of 1.97% was recorded in January 2019.

The NSO said the significant decline in headline inflation and food inflation in June 2025 is mainly attributed to favourable base effect and decline in inflation of vegetables, pulses and products, meat and fish, cereals and products, sugar and confectionery, milk and products and spices.