India’s retail inflation cooled sharply to 0.25% in October 2025, marking the lowest year-on-year inflation since the current CPI series began. The sharp moderation was driven by easing food prices and the full impact of the recent GST reduction, according to data released by the Ministry of Statistics and Programme Implementation (MOSPI) on Wednesday.
Headline inflation at 0.25%
The All India Consumer Price Index (CPI) stood at 197.3 in October 2025, with rural inflation at -0.25% and urban inflation at 0.88%, down from 1.44% recorded in September 2025. This represents a 119-basis-point drop month-on-month, indicating a broad-based cooling across consumption categories.
Food inflation turns negative
The Consumer Food Price Index (CFPI) registered a steep decline to -5.02% in October 2025, compared to -2.33% in September 2025, reflecting falling prices in key categories such as oils, fats, vegetables, fruits, eggs, cereals, footwear, and transport.
Rural food inflation stood at -4.85%, while urban food inflation was even lower at -5.18%, showcasing a uniform deflationary trend across both segments.
This is the lowest food inflation recorded in the CPI series and reflects both the favorable base effect and easing supply-side pressures.
Sectoral breakdown
- Housing inflation remained stable at 2.96%, marginally down from 2.98% in September.
- Education inflation edged up to 3.49%, compared to 3.44% previously.
- Health inflation eased to 3.86%, down from 4.39% in the prior month.
- Transport & communication inflation dropped sharply to 0.94%, against 1.82% in September.
- Fuel & light inflation remained steady at 1.98%.
Key metrics table
| Category | Oct 2025 (Prov.) | Sept 2025 (Final) | Oct 2024 | MoM Change (bps) |
|---|---|---|---|---|
| CPI (General) | 0.25% | 1.44% | 6.21% | -119 |
| CFPI (Food) | -5.02% | -2.33% | 10.87% | -269 |
| Rural CPI | -0.25% | 1.07% | 6.68% | -132 |
| Urban CPI | 0.88% | 1.83% | 5.62% | -95 |
| Housing | 2.96% | 2.98% | — | -2 |
| Education | 3.49% | 3.44% | — | +5 |
| Health | 3.86% | 4.39% | — | -53 |
| Transport & Communication | 0.94% | 1.82% | — | -88 |
| Fuel & Light | 1.98% | 1.98% | — | 0 |
Key takeaway
The moderation in both headline and food inflation reflects the GST rate cuts taking full effect across goods categories, alongside improved agricultural supply. Economists expect inflation to remain below the RBI’s 4% target range in the short term, offering room for a potential policy recalibration in the upcoming Monetary Policy Committee (MPC) meeting.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Economic indicators are subject to revision. Author or Business Upturn is not liable for any interpretation or conclusions drawn from the data.
