The year-on-year (YoY) CPI inflation expectedly eased to an all-time low of 0.3% in October 2025 from 1.4% in September 2025, mildly below ICRA’s forecast of 0.5%. This stemmed from the food and beverage segment (F&B: to -3.7% from -1.4%), that saw a deeper deflation in October 2025, compared to the prior month. However, the core-CPI inflation was stable at 4.5%, as the hardening in gold and silver prices dulled the softening across several items after the GST rate cut. ICRA expects the CPI inflation to rise above 1% in November 2025 as the favourable base begins to fade away and cross the 4%-mark in Q1 FY2027. The Monetary Policy Committee’s (MPC’s) decision would be a close call in December 2025, tilted slightly towards a cut. While the dovish tone in October 2025 policy favours a 25-bps rate cut, upcoming data releases, like Q2 FY2026 GDP, would also guide the policy decision.

EXHIBIT: CPI inflation slid to record low of 0.3% in October 2025 from 1.4% in September 2025, printing lower than ICRA’s forecast (+0.5%); core-CPI inflation, however, was stable at 4.5% in the month vs. September 2025

Source: NSO; CEIC; ICRA Research