Retail Inflation Hits 6.09% in October, Crosses RBI’s 6% Ceiling as Food Prices Surge
CPI inflation rose to 6.09% in October from 5.54% in September, led by 8.51% food inflation. Economists now see a December repo rate hike as likely.
India’s retail inflation climbed to 6.09% in October 2026, pushing past the 6% upper limit of the Reserve Bank of India’s comfort band for the first time this year. The latest official data show the consumer price index (base year 2024) rising from 5.54% in September, and well above the 2.74% recorded in January.
The RBI’s target is 4%, with a tolerance range of 2% to 6%. A single month above the band does not count as a formal miss; that happens only if average inflation stays outside the range for three quarters in a row.
Food prices lead the rise
Inflation in food and beverages, which make up 36.75% of the CPI basket, jumped to 8.51% from 7.36% in September. Prices rose faster in 11 of the 12 CPI divisions, according to ThePrint’s reading of the data.
Villages are feeling the pinch more than cities. Rural inflation stood at 6.63% against 5.41% in urban areas, a gap of 1.22 percentage points. Rural prices have run ahead of urban prices every month since February.
There was one softer signal. Prices rose 0.51% month-on-month in October, slower than 0.69% in September, and the monthly pace has eased for four months in a row since peaking at 1.03% in June. The annual figure still went up because prices were roughly flat in October 2025, giving a low base.
Rate hike talk grows
ICRA Chief Economist Aditi Nayar expects CPI inflation to stay above 6% for the next couple of months, with milk, sugar and onion keeping food inflation above 8% in November. She said a further 25-basis-point repo rate increase looks almost certain when the Monetary Policy Committee meets from 2 to 4 December. She also pointed to a weak monsoon and low reservoir levels as risks to the rabi crop.
Inflation worries weighed on Dalal Street on Friday morning, with the Sensex and Nifty trading lower as traders priced in the chance of tighter policy.
Photo: Vegetable market, Ahmedabad by Bernard Gagnon, CC BY-SA 3.0, via Wikimedia Commons
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