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New Delhi: India’s retail inflation eased dramatically to a provisional 0.25% in October, the lowest year-on-year rise recorded since the introduction of the current Consumer Price Index (CPI) series. The headline inflation rate, measured by the all-India CPI, dropped by 119 basis points from September’s level, marking a notable moderation in price pressures across key consumption categories.
The sharp fall in overall inflation was led by a steep decline in food prices. The Consumer Food Price Index (CFPI) registered a year-on-year contraction of 5.02% in October, compared with a fall of 2.33% in September. Rural and urban food inflation stood at -4.85% and -5.18%, respectively. The October reading marks the lowest food inflation rate of the current CPI series, reflecting broad-based easing across major food items.
According to the Ministry of Statistics and Programme Implementation (MoSPI), the fall in both headline and food inflation during October was primarily driven by the full-month impact of the reduction in GST, a favourable base effect, and price declines in categories such as oils and fats, vegetables, fruits, eggs, cereals and products, footwear, and transport and communication.
In rural areas, headline inflation was provisionally estimated at -0.25% in October, compared with -1.07% in September, while rural food inflation dropped to -4.85% from -2.22%. Urban inflation, too, softened, with the headline rate easing to 0.88% from 1.83% in the previous month and food inflation declining further into deflationary territory at -5.18% against -2.47% in September.
Among specific components, housing inflation was reported at 2.96% in October, marginally lower than 2.98% in September. Education inflation edged up to 3.49% from 3.44%, while health inflation moderated to 3.86% from 4.39%. Inflation in transport and communication eased to 0.94% from 1.82% in September, whereas fuel and light inflation remained unchanged at 1.98%.
For data collection, the National Statistical Office (NSO) covered 1,181 villages and 1,114 urban markets across the country, achieving a 100% response rate in rural areas and 98.29% in urban centres. Market-wise price reporting stood at 88.53% for rural and 92.17% for urban markets.
“India’s CPI inflation trajectory calls for a strong case for decisive actions. The higher growth numbers for Q2 and the October inflation print will pose a serious dilemma for the RBI for a rate action in December. Even for February policy there are many moving parts,” said SBI Research in a statement.
The next set of CPI data, for November 2025, is scheduled for release on December 12.