India's inflation rate inches up in November 2025, stays well below RBI target
India's inflation rate rose to 0.71% in November 2025 as against a record low of 0.25% in October 2025. The RBI has an inflation target of 4%.
India's inflation rate picked up in November from a record low in October but stayed well below the Reserve Bank of India's 4% target. That keeps the door open for more repo rate cuts in the new year.
The consumer price index rose 0.71% from a year earlier, the Statistics Ministry said Friday, largely in line with the median estimate of 0.7% in a Bloomberg survey of economists. Inflation was at an all-time low of 0.25% in October.
The Reserve Bank of India cut interest rates by 25 basis points last week and signaled its willingness to ease monetary policy further, citing soft inflation readings. It expects inflation to climb from January and sees CPI averaging 2.9% in the three months through March.
Food prices, which make up about half of the consumer basket, fell 3.91%. That compares with a record 5.02% decline in October. The drop likely reflected last year’s high base and improved supplies after above-normal rains. Vegetable prices fell 22.2%, easing from a 27.57% contraction in October.
Consumption tax cuts by the government also helped keep overall prices in check. Core inflation, which excludes volatile food and fuel, slowed to 4.42% last month, compared with 4.49% in October, according to Bloomberg Economics’ calculations.
There is still “room for the RBI to deliver another rate cut in the February policy if growth shows signs of losing momentum post the festive season,” said Sakshi Gupta, economist with HDFC Bank Ltd.
Food prices are on the decline owing to ample supply, and are sinking despite an uptick in dairy, fruit and protein prices. The RBI expects inflation to stay comfortably below its 4% target until at least September. A scheduled review of its mandate in March may see the government extend the current 2%-to-6% target band for another five years.
Benign inflationary conditions will continue to provide “ample policy space for monetary easing, with or without rate cut, well into next fiscal year as well,” said Rajni Thakur, economist with L&T Finance.
A slight upward bias in inflation was expected after October’s record low, and economists say the latest print is unlikely to alter the RBI’s policy path. The central bank will get the December reading before its February policy meeting, which should help it gauge underlying inflation more clearly once the festive-season boost fades.
Even as the data-dependent central bank has kept its options open, “the rate cutting cycle is clearly nearing the end, followed by a prolonged pause,” said Upasna Bhardwaj, economist with Kotak Mahindra Bank Ltd.
