India’s retail inflation is expected to hit a record low in October, buoyed by easing food prices and a steady decline in fuel and core inflation, according to early government and market estimates. Economists suggest the Consumer Price Index (CPI) could fall below 4%, marking its lowest level in nearly three years.
Preliminary data indicate that prices of key food items — including vegetables, pulses, and edible oils — have moderated significantly following a period of sharp volatility earlier this year. Favorable monsoon conditions and improved supply management by the government have helped stabilize food inflation, a major driver of India’s overall price index.
“The recent downtrend in inflation reflects both effective supply interventions and a high base effect,” said an economist with a leading rating agency. “If the trajectory continues, it could give the Reserve Bank of India more flexibility on policy rates next quarter.”
Fuel and energy inflation also eased, supported by lower global crude oil prices and stable domestic fuel taxes. Meanwhile, core inflation — which excludes volatile food and energy components — remained muted, suggesting that price pressures in services and manufacturing are under control.
A decline in retail inflation would provide relief to consumers and bolster household purchasing power ahead of the festive season. It could also strengthen the government’s economic narrative ahead of upcoming state elections, highlighting success in managing cost-of-living pressures.
However, experts caution that risks remain, particularly from potential spikes in global commodity prices and ongoing supply chain disruptions in some sectors.
Official CPI data for October is expected to be released next week, which will confirm whether India’s inflation rate has indeed reached a new low.
