India’s annual retail inflation rate dropped sharply to 0.25% in October 2025, the lowest level ever recorded in the current Consumer Price Index (CPI) series, according to official government data.
Key Highlights
- Headline Inflation: 0.25% in October 2025, down from 1.44% in September 2025
- Food Inflation: -5.02% (Deflation) in October 2025
- Rural Inflation: -0.25% (Provisional)
- Urban Inflation: 0.88%
- Housing Inflation: 2.96%
- Education Inflation: 3.49%
- Health Inflation: 3.86%
- Fuel & Light Inflation: 1.98%
- Transport & Communication Inflation: 0.94%
Headline Inflation Hits Record Low
The all-India headline inflation, based on the Consumer Price Index (CPI), stood at 0.25% in October 2025. This represents a fall of 119 basis points from September’s revised figure of 1.44%. This is the lowest year-on-year CPI inflation recorded since the index was introduced.
Officials attributed the decline to the full impact of GST reduction, a favorable base effect, and a broad drop in prices of essential goods including oils, fats, vegetables, fruits, eggs, cereals, footwear, and transport services.
Food Prices Show Deep Deflation
The Consumer Food Price Index (CFPI) recorded a sharp decline of -5.02% year-on-year in October 2025, compared with -2.33% in September. This marks a drop of 269 basis points month-on-month.
Food deflation was visible across both urban and rural areas — with rural food inflation at -4.85% and urban at -5.18%. Analysts said that price cuts in vegetables, edible oils, and fruits largely contributed to the fall.
Rural and Urban Inflation Trends
Inflation in rural India also declined notably. The rural headline inflation stood at -0.25% in October 2025 compared to -1.07% in September. Meanwhile, the rural food inflation rate eased to -4.85% from -2.22% previously.
In urban areas, headline inflation dropped from 1.83% in September to 0.88% in October. Urban food inflation also fell sharply from -2.47% to -5.18%, indicating widespread deflation in food prices.
Sector-wise Inflation Details
1. Housing
The year-on-year inflation rate for housing in October 2025 stood at 2.96%, marginally lower than 2.98% recorded in September. Housing inflation is calculated only for the urban sector.
2. Education
Education inflation increased slightly to 3.49% in October, compared to 3.44% a month earlier. The figure represents combined data for both urban and rural areas.
3. Health
Health inflation eased to 3.86% in October 2025, down from 4.39% in September, showing some relief in medical costs across India.
4. Transport and Communication
The inflation rate for transport and communication services dropped to 0.94% in October from 1.82% in September, aided by lower fuel and service costs.
5. Fuel and Light
The inflation rate for the fuel and light category remained steady at 1.98% in October 2025 — unchanged from the previous month.
Reasons Behind the Sharp Fall in Inflation
The historic decline in India’s retail inflation during October 2025 can be traced to three main factors:
- GST Reductions: The full-month impact of reduced Goods and Services Tax (GST) rates brought down costs across several product categories.
- Base Effect: A favorable comparison base from October 2024 helped moderate inflation figures.
- Broad-Based Price Decline: Major commodities such as food items, oils, footwear, and transport services saw significant price drops.
Conclusion
With retail inflation plunging to a record low of 0.25% in October 2025 and food inflation entering deep deflation, India’s consumers are seeing broad relief in prices. Economists say that if this trend continues, it could give the Reserve Bank of India (RBI) more flexibility to maintain its accommodative stance on interest rates in the coming months.
