India’s Consumer Inflation Cools to Record Low of 0.25% in October, Driven by Falling Food Prices

India’s retail inflation eased sharply to 0.25% in October 2025, the lowest year-on-year reading of the current Consumer Price Index (CPI) series, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on November 12. The moderation was primarily led by a significant decline in food prices and the impact of lower Goods and Services Tax (GST) rates.

Sharp Drop in Headline CPI

The headline CPI fell by 119 basis points from 1.44% in September, marking the sharpest monthly decline in recent months. The drop reflects easing price pressures across key consumption categories and a favourable base effect compared to the same period last year.

The MoSPI attributed the fall in inflation to the full-month impact of the recent GST reductions and declines in prices of essential goods and services. Major categories that saw lower prices included oils and fats, vegetables, fruits, eggs, cereals, footwear, and transport & communication.

Food Inflation Turns Deeply Negative

Food inflation, a key component of the CPI, turned negative at –5.02% in October, compared to –2.33% in September, recording its lowest level under the current CPI series.

The trend was consistent across regions, with rural food inflation at –4.85% and urban food inflation at –5.18%. The steep decline in food prices was attributed to improved supply conditions, steady crop arrivals, and easing prices in perishables such as vegetables and edible oils.

State-Wise Inflation Trends

Inflation patterns varied across states. Kerala, Punjab, and Karnataka reported positive inflation rates, reflecting localised cost pressures in housing, healthcare, and services. In contrast, Uttar Pradesh, Madhya Pradesh, and Telangana recorded deflationary trends, driven largely by steep declines in food and transport prices.

Understanding the CPI Metric

The Consumer Price Index (CPI) is the primary measure of retail inflation in India. It tracks changes in the prices of a fixed basket of consumer goods and services such as food, housing, apparel, transport, education, healthcare, and communication.

The CPI is one of the two key high-frequency indicators published monthly by the government, the other being the Index of Industrial Production (IIP). Together, they help policymakers and analysts assess price stability and economic momentum.

Read More: Government Proposes Overhaul of Industrial Growth Measurement Under New IIP Framework.

Conclusion

India’s retail inflation fell to a historic low of 0.25% in October, led by a steep decline in food prices and lower GST-related costs. The data signals a period of subdued inflationary pressure, supported by stable supply conditions and easing commodity prices across categories.

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