New Delhi [India], November 12 (ANI): India’s retail inflation sharply declined to 0.25 per cent in October 2025, marking the lowest year-on-year inflation in the current Consumer Price Index (CPI) series, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Wednesday. This represents a decrease of 119 basis points compared to September 2025.
Food inflation, a critical component of the CPI, fell to -5.02 per cent in October, the lowest in the current CPI series, reflecting a decline of 269 basis points from the previous month. The ministry attributed the drop in both headline and food inflation primarily to the full-month impact of Goods and Services Tax (GST) rate cuts, a favorable base effect, and reduced prices in items such as oils and fats, vegetables, fruits, eggs, footwear, cereals and products, and transport and communication.
“The impact of reduction in GST was visible across all sectors,” the ministry said in a statement.
Economists noted that while the inflation trajectory is expected to remain benign, the Reserve Bank of India (RBI) will need to separate festive and GST-related demand from cyclical economic recovery. “We remain skeptical on the sustainability of the recent pickup in economic activity and hence see some room for further monetary easing,” said Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank.
Following are the top five states with higher year-on-year inflation in October 2025, as per the MoSPI data.
India’s inflation management contrasts with rising concerns in several advanced economies. The RBI had maintained its benchmark repo rate at 6.5 per cent for eleven consecutive meetings before cutting it in February 2025, the first reduction in nearly five years. Analysts expect inflation to remain under control, allowing the central bank to continue supporting economic growth.
“The Monetary Policy Committee (MPC) is likely to revise its CPI inflation projection for FY2026 downward from 2.6 per cent, driven by soft sequential momentum in food prices and GST rationalisation impacts,” said Aditi Nayar, Chief Economist at ICRA. She added that this, coupled with the dovish tone of the October 2025 policy document, could support a 25-bps rate cut in the December 2025 policy review, depending on Q2 FY2026 GDP growth and upcoming trade and industrial production data.
“The December 2025 MPC review remains a close call, as data on GDP, trade, and industrial output will guide the policy decision,” Nayar noted. (ANI)
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