India's retail inflation rate falls to a record low of 0.25% in October 2025 after GST rate cuts

India's record-low inflation rate is due to a high base effect—food inflation had soared last year—even as household items became cheaper due to GST rate cuts.

India's retail inflation rate fell to its lowest on record in October 2025 due to a sharp drop in food inflation and GST rate cuts.

Vegetable prices declined 27.57% after a 21.38% fall a month ago. (ANI)

The consumer price index — a measure of India's retail inflation — rose 0.25% from a year earlier, according to data released by the Ministry of Statistics and Programme Implementation on Wednesday. That compares with a Bloomberg estimate of 4%. The reading is the lowest since at least 2012.

The record-low inflation rate is due to a high base effect—India's food inflation had soared last year—even as household goods became cheaper due to the GST rate cuts that came into effect on 22 September.

“The decline in headline inflation and food inflation is mainly attributed to full month's impact of decline in GST...,” the government said in a statement.

Food prices fell 5.02% year-on-year in October against a revised fall of 2.33% in September. Vegetable prices declined 27.57% after a 21.38% fall a month ago.

To be sure, the moderation in prices may be short-lived, with the Reserve Bank of India forecasting the retail inflation rate to rebound to 4% next quarter as the favourable base effects fade.