Higher food prices push retail inflation by nearly three times

NEW DELHI: Retail inflation inched up to 0.71 per cent in November, from a record low of 0.25 per cent in the previous month, on rising prices of food items, government data showed on Friday.

Consumer Price Index-based retail inflation remained below the RBI’s 4 per cent inflation target for the 10th month in a row. Also, November is the second month when retail inflation has remained below 1 per cent level in the current CPI series which has data from 2014.

According to data released by the National Statistics Office (NSO), deflation in food items was 3.91 per cent in November against 5.02 per cent in October.

The rise in headline and food inflation during November 2025 is mainly attributed to an increase in inflation of vegetables, eggs, meat and fish, spices, fuel and light, the NSO said.

Fuel and light inflation for November was 2.32 per cent against 1.98 per cent in October 2025.

ICRA chief economist Aditi Nayar said a continued base-normalisation and the hardening in prices of some vegetables could make the headline CPI inflation cross 1.5 per cent in the next print, which will be the last before the next MPC.

“The evolving inflation-growth outlook, as well as the fiscal policy measures unveiled by the next Union Budget, will guide the MPC’s next decision. Our base case suggests a pause in the MPC’s February 2026 policy,” Nayar said.

PHDCCI CEO-secretary general Ranjeet Mehta said, “Over the next two quarters, we anticipate that India’s inflation will stay within a manageable range on the back of benign food prices, GST rates rationalisation, reasonable energy prices, and Reserve Bank of India’s strategic monetary management.”

Kotak Mahindra Bank chief economist Upasna Bhardwaj said, “While the inflation trajectory is expected to move upward from here on, we see the trajectory fairly benign until 1HFY27.”

“Going ahead, with RBI having kept additional actions data-dependent, we see some room for a 25 bps repo rate cut. However, the rate-cutting cycle is clearly nearing the end, followed by a prolonged pause,” Bhardwaj added.