Retail Inflation Hits 6.09% in October, Crosses RBI’s 6% Limit

Retail inflation rose to 6.09% in October from 5.54% in September, the Ministry of Statistics and Programme Implementation said in its Consumer Price Index release on 12 November. It is the first time in two years that the figure has crossed the Reserve Bank of India’s (RBI) 6% upper tolerance limit. Food inflation climbed to 8.94% from 7.74%, with onions, garlic and ginger leading the rise, according to PTI.

Onion Up 116%, Garlic and Ginger Follow

Eleven of the 12 groups in the price basket recorded higher inflation, PTI reported. Food and beverages stood at 8.51%, restaurant and accommodation services at 10.06%, and personal care and miscellaneous goods and services at 10.14%. Onion prices were 116.22% higher than a year ago, garlic 60.74%, ginger 48.32% and lemon 47.30%. Silver jewellery was up 52.39%. A few items got cheaper: potato fell 14.24% and cauliflower 10.57%, according to IANS reporting carried by The Hans India.

The onion jump was already visible last month, when food inflation hit 7.74% in September. The latest inflation reading is the first to breach the RBI’s ceiling under the new CPI series, Business Today reported.

Also read SBI Chairman CS Setty Expects 50 bps RBI Rate Hike in December

A December Rate Hike Looks Likely

The RBI raised the repo rate by 0.25 percentage points to 5.50% on 7 October, its first increase since February 2023. Economists now expect a second one. Aditi Nayar of ICRA said a further 25 basis point hike in December “appears almost certain”, and DBS’s Radhika Rao said the data “reinforces our expectation” of a December increase. SBI Research now expects 25 basis points, down from its earlier forecast of 50, Business Today reported.

For borrowers, the October hike alone adds about Rs 469 a month to the EMI on a Rs 30 lakh, 20-year home loan, if a bank passes on the full 0.25 points. Loans linked to the repo rate change at their next reset date.

Policy Meeting on 2 to 4 December

The RBI has projected inflation averaging 6.0% in October to December and 5.2% for 2026-27. Its Monetary Policy Committee meets from 2 to 4 December; the RBI has not said whether it will hike again.

Source: MoSPI press release on the Consumer Price Index (base 2024=100) for October 2026, via PIB. Also based on reporting by DT Next (PTI), The Hans India and Business Today.

Image: DT Next.