What: India’s retail inflation fell to an eight-year low in September 2025, supporting stronger consumer spending, retail growth, and investment.

Why it is important: The development reflects both India’s macroeconomic stability and its growing attractiveness for retail investment, especially as global markets face inflationary pressures.

India’s retail inflation reached its lowest point in eight years in September 2025, creating a favourable environment for both consumers and retailers. This decline in inflation has directly contributed to a 4% year-on-year rise in retail sales in April 2025, with sectors such as quick service restaurants and beauty leading the growth (India Economic Times, May 2025). Retailers are observing more purposeful buying patterns and increased demand for discretionary categories, indicating a boost in consumer confidence as price pressures ease. The positive inflation trend is also supporting profitability and strategic pricing, with affluent households projected to reach 30% by 2035 and digital innovation reshaping retail dynamics (BCG, March 2025). Macroeconomic stability is further evidenced by a 55% surge in retail leasing activity in India’s top eight cities, driven by international brand entries and infrastructure development (India Economic Times, April 2025). Compared to global markets, where inflation and economic uncertainty are weighing on retail forecasts, India’s retail sector stands out for its resilience and growth trajectory (Visa, January 2025; Forbes, September 2025).

IADS Notes: India’s retail inflation falling to an eight-year low in September 2025 (India Economic Times, October 2025) has created a supportive backdrop for retail expansion, as seen in the 4% rise in retail sales in April 2025 and the surge in retail leasing activity (India Economic Times, May and April 2025). The shift toward more purposeful buying and increased discretionary spending is reinforced by projections of affluent households reaching 30% by 2035 and robust digital infrastructure (BCG, March 2025). This macroeconomic stability and consumer confidence contrast with global markets, where inflation and cautious forecasts dominate the retail landscape (Visa, January 2025; Forbes, September 2025).

India's retail inflation falls to 8-year low in September