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Informist, Thursday, Nov. 12, 2026

 

NEW DELHI – India's headline inflation, based on CPI, rose to a two-year high in October mainly on the back of food inflation following a weak monsoon this year. At 6.09%, retail inflation in October breached the upper end of the Reserve Bank of India's tolerance band of 2-6%.

 

Headline inflation was 5.54% in September and 0.04% a year ago. The CPI print for October is largely in line with economists' expectations. According to an Informist Poll, headline inflation was seen at 6.0% in October.

 

CPI inflation of 6.09% reflected the continued broadening of inflationary pressures and the transmission of global shocks, according to Tanay Dalal, economist at Axis Bank. "Oct CPI inflation at 6.09% reflected the continued broadening of inflationary pressures and the transmission of global shocks, amid seasonal increases in clothing prices and higher car prices," Dalal, senior vice-president at Axis Bank's Business Economic Research, said in a note.

 

Core inflation, which excludes food and fuel items, rose to 4.5% in October from 4.3% in September. ICRA sees core inflation inching up further in November, partly due to the unfavourable base effect arising from the goods and services tax cuts implemented last year. The rising core inflation is likely to keep headline inflation at 6.1% in November.

 

At 6.63%, rural inflation in October continued to be higher than urban inflation at 5.41%. In September, rural inflation was 6.08% and urban inflation was 4.88%.

 

The food price index was up 0.9% on month in October, which caused the general index to rise 0.5% on month. Food inflation rose to 8.94% last month from 7.74% in September. Onion, garlic, ginger, and lemon continued to be among the key items with high inflation at an all-India level in October. Onion inflation was 116.22% in October, up from 108.13% in September. Garlic inflation rose to 60.74% in October from 54.62% a month ago. Lemon inflation was 47.30% last month, up from 36.41% in September. Ginger inflation was 48.32% in October, slower than 62.85% in September.

 

Inflation in the food and beverages segment rose to 8.51% in October from 7.36% in September. "The sustained uptick in food & beverages (F&B) inflation played the key role in pushing up the headline inflation number, even as the hardening was broad-based across 11 of the 12 divisions," Aditi Nayar, chief economist at ICRA, said in a note.

 

Restaurant and accommodation services continued to see an impact in October from the second round of the war in West Asia, with inflation rising to 10.06% in October from 9.36% in September. Within this segment, food and beverage serving services inflation climbed to 10.09% from 9.39% a month ago.

Transport inflation was 5.84% in October, continuing its upward trajectory from 5.01% in September. The inflation was driven by global supply chain issues and high commodity prices as a result of the US-Iran war that started on Feb. 28. Inflation in transport services for goods moderated to 7.34% in October from 14.73% in September.

 

Inflation in the housing, water, electricity, gas, and other fuels segment rose to 2.90% in October from 2.74% in September. Electricity, gas, and other fuel inflation rose to 3.71% last month from 3.24% in September. Information and communication inflation followed suit, rising to 3.16% in October from 2.44% the previous month.

 

Health inflation rose to 2.05% in October from 1.40% in September. Educational services inflation, which has been rising for the past few months, rose to 4.02% from 3.94% in September. Inflation in personal care, social protection, and miscellaneous goods and services eased to 10.14% in October from 13.75% in September, reflecting the fall in international gold prices and rupee appreciation during the month. The category continued to show the highest inflation within the basket. Meanwhile, inflation in silver jewellery was recorded at 52.39% last month, down from 87.80% in September.

 

Clothing and footwear inflation rose to 4.96% last month from 3.93% in September, largely because of festival season demand.

 

Among states and Union territories, Puducherry, Dadra and Nagar Haveli and Daman and Diu, Tamil Nadu, Telangana, and Andhra Pradesh reported the highest inflation in October at 7.96%, 7.59%, 7.29%, 7.26%, and 7.25%, respectively. Amongst these, Andhra Pradesh, Tamil Nadu, and Telangana reported the highest food inflation too. Mizoram at 2.85%, Andaman and Nicobar Islands at 3.46%, and Meghalaya at 3.63% reported the lowest inflation.

 

Overall, ICRA expects CPI inflation to average 6.2% in Oct-Dec "before easing modestly thereafter as the adverse base effect dissipates", Nayar said. This is above the RBI's headline inflation projection of 6.0% for the December quarter. Additionally, Nayar said, risks to CPI inflation remain tilted to the upside, "reflecting the impact of the deficient and uneven monsoon, while crude oil prices remain a key (factor to monitor)".

 

Axis Bank's Dalal said inflation is likely to remain above 6% until June. "The (inflation) numbers increase the risk that policy rates may need to rise above the estimated neutral rate of 6%," he said in his note. The central bank had increased the repo rate by 25 basis points to 5.50% in October, a first in nearly three years.

 

The following table details the general index of the CPI and inflation for October:

 

	Weight	Index for October	Month-on-month change (%)	Inflation for October	Inflation for September
Food and beverages	36.75	112.78	0.90	8.51%	7.36%
Paan, tobacco, and intoxicants	2.99	108.95	0.21	4.93%	4.80%
Clothing and footwear	6.38	110.52	0.81	4.96%	3.93%
Housing, water, electricity, gas, and other fuels	17.67	104.67	0.25	2.90%	2.74%
Furnishings, household equipment, and routine household maintenance	4.47	106.72	0.54	3.94%	3.11%
Health	6.1	105.67	0.35	2.05%	1.40%
Transport	8.8	106.31	0.18	5.84%	5.01%
Information and communication	3.61	106.53	0.44	3.16%	2.44%
Recreation, sport, and culture	1.52	105.93	0.40	2.52%	2.16%
Education services	3.33	109.19	0.13	4.02%	3.94%
Restaurants and accommodation services	3.35	115.68	0.78	10.06%	9.36%
Personal care, social protection, and miscellaneous goods and services	5.04	124.5	(-)0.68	10.14%	13.75%
Consumer Food Price Index	34.78	113.23	0.94	8.94%	7.74%
All India	100	110.05	0.51	6.09%	5.54%

Source: Ministry of Statistics and Programme Implementation.

 

End

 

Reported by Radhika Tiwari and Shweta

Edited by Rajeev Pai

 

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