India’s retail inflation quickens to 0.71% in November from record low of 0.25% in October

India’s retail inflation quickened to 0.71% in November on an annual basis, as against a record low of 0.25% in October, as food prices firmed after months of decline, even as the impact of recent Goods and Services Tax (GST) rate cuts lingered. This marked the 10th straight month that inflation remained below the Reserve Bank of India’s medium-term target of 4%.

Food prices, which account for nearly half of the CPI basket, fell 3.91% year-on-year in November, compared with a 5.02% decline in October.

Earlier, the Reserve Bank of India’s Monetary Policy Committee (MPC) said the central bank now expects inflation to average 2.0% in the current fiscal year, sharply lower than its earlier projection of 2.6% and also below the 2.2% estimate from a Reuters poll conducted a month earlier.

The central bank has steadily pared back its inflation forecast over the course of the fiscal year while raising its growth projections in successive MPC meetings. The FY26 inflation outlook, first estimated at 4.2% in February, was cut to 2.6% in October.

The MPC also released updated quarterly inflation projections, forecasting 0.6% in Q3, 2.9% in Q4, 3.9% in Q1, and 4.0% in Q2 of FY27. By comparison, the October policy round had projected inflation at 1.8% in Q3, 4.0% in Q4, and 4.5% in Q1 of FY27.

This follows the MPC’s decision to cut the policy repo rate by 25 basis points to 5.25%, while maintaining a neutral stance, signalling a calibrated approach to boosting growth without compromising inflation control.In a notable revision, the committee raised its GDP growth forecast for FY2025–26 to 7.3%, from the earlier estimate of 6.8%.