Inflation Insights: India’s October Data Signals Possible RBI Rate Cuts on Horizon

India’s inflation scenario in October 2025 reflects a remarkable economic milestone with headline Consumer Price Index (CPI) inflation plunging to a decade-low 0.25%, signaling subdued price pressures across the economy. This steep fall, a 119 basis point decline from September, is credited largely to the full impact of Goods and Services Tax (GST) rationalization and a notable drop in food prices. The Ministry of Statistics and Programme Implementation (MoSPI) data further revealed that food inflation sharply contracted, reinforcing the overall easing.

 

Conversely, core inflation, which excludes volatile food and fuel prices and better reflects underlying demand-side pressures, edged slightly higher to 4.4% in October from previous months. Economists point to rising domestic gold prices as contributing to this stickiness in core inflation. Despite this, the benign headline inflation print presents the Reserve Bank of India (RBI) with increased room for potential rate cuts in upcoming monetary policy reviews.

 

State-wise inflation data showed Kerala registering the highest rate at 8.56%, with several other states experiencing moderate inflation levels. The easing inflation trajectory, combined with favorable base effects and GST reductions, has been widely acknowledged as supporting domestic economic stability and consumer affordability.

 

Key Highlights:  

Source references: Ministry of Statistics and Programme Implementation (MoSPI), Reserve Bank of India, economists’ analyses via Reuters, ANI, ThePrint, NDTV Profit.