India’s retail inflation quickened to 0.71% year-on-year in November 2025, up from a record low of 0.25% in October 2025, according to official government data. This marks the tenth consecutive month that inflation has remained below the Reserve Bank of India’s (RBI) medium-term target of 4%.
The rise in headline inflation was driven mainly by a slowing pace of food price declines, particularly in vegetables and other perishable items, as well as modest increases in fuel costs. Although food prices were still in deflation on an annual basis, the rate of decline narrowed significantly compared with October.
Key Takeaways
-
Inflation Pickup: Retail inflation increased to 0.71% in November, up from 0.25% in October 2025 a rise of 46 basis points.
-
Food Prices: Food inflation remained negative but the decline was less steep compared with the previous month, pointing to emerging price pressures in essential food items.
-
Below RBI Target: Even with the uptick, inflation stayed well below the RBI’s target range of 2%–6%, marking the third straight month under the target band.
What This Means
The gradual pick-up in inflation while still muted signals that price pressures may be stabilising after a period of very low readings. This low-inflation environment has contributed to the RBI’s ability to cut key policy rates by 125 basis points in 2025, including a 25 basis-point cut in early December.
For monetary policy watchers, the data suggests that inflation is beginning to move off historic lows, but still presents room for policy flexibility. The combination of controlled inflation and robust GDP growth strengthens the central bank’s position to balance growth support with price stability.
Implications for Business & Investors
-
Interest-Rate Outlook: With inflation remaining subdued, the RBI may retain policy flexibility, potentially keeping room for further adjustments if growth momentum needs support.
-
Consumer Spending: A stable inflation backdrop can support household purchasing power and consumer demand, which in turn can benefit sectors tied to discretionary spending.
-
Portfolio Strategy: For investors, low inflation trends can influence expectations around interest rates, bond yields and valuation dynamics across asset classes.
Source: The Economic Times