India’s retail inflation rate increased to 0.71% in November 2025, rising from a record low of 0.25% in October, according to government data released on Friday. Despite the uptick, inflation stayed below the Reserve Bank of India’s target range of 2% to 6% for the third consecutive month.
The latest Consumer Price Index (CPI) numbers show that food inflation continued to ease, driven largely by a decline in vegetable prices. Food prices fell 3.91% year-on-year in November, compared with a 5.02% decline in October. Meanwhile, vegetable prices dropped 22.20% YoY, after falling 27.57% in the previous month.
This moderation in inflation comes at a time when the Indian economy is experiencing what economists describe as a “rare Goldilocks phase,” marked by strong economic growth and low to moderate inflation. Encouraged by these conditions, the RBI cut the benchmark repo rate by 25 basis points earlier in December. This brought the total rate cuts in 2025 to 125 basis points.
Reflecting improved macroeconomic stability, the RBI also revised its inflation forecast for FY26 down to 2%, from 2.6%, and raised its GDP growth outlook to 7.3%, up from the earlier estimate of 6.8%.
India’s robust economic momentum continues despite external pressures, including the recently imposed 50% U.S. tariff on Indian exports. Economists attribute this resilience to structural reforms such as the Goods and Services Tax (GST) and newer labour regulations.
India recorded 8.2% GDP growth in the July–September quarter, prompting the government to revise its annual growth estimate to 7% or higher, compared with the earlier range of 6.3% to 6.8%.
