November CPI Review: Soft Inflation Print Strengthens Case For Further RBI Easing

India’s headline CPI rose to 0.71% year on year in November, remaining below 1% for a second consecutive month and extending the run of sub-target inflation prints. The data reinforced a broadly benign inflation narrative across brokerages, with food prices continuing to deflate, core inflation staying sticky around 4.3%–4.25%, and policy conditions seen as supportive of further easing by the Reserve Bank of India.

BofA Global Research said November CPI inflation was broadly in line with its estimate of 0.63% and only marginally higher than the record low seen around the October policy period. Importantly, inflation remained below 1% and marked the tenth consecutive print under the RBI’s 4% target. While core inflation held firm at 4.25% year on year, core excluding gold and silver was significantly lower at 2.4%, compared with 2.5% in October.

On a sequential basis, headline CPI rose by a modest 0.3% month on month on a non-seasonally adjusted basis, with some pickup in food and fuel prices. BofA highlighted that gold prices surged over 62% year on year, the sharpest increase under the new series, keeping core inflation elevated.

Fuel inflation also edged up to 2.4% year on year, rising 0.2% sequentially. On policy, BofA said a 25 basis point cut at the December MPC meeting, taking the repo rate to 5.25%, was in line with expectations, describing the RBI’s communication as dovish. It continues to expect another 25 bp cut in February, taking the repo rate to 5.00%, subject to the growth outlook remaining weak.

Citi Research noted that headline inflation ticked up to 0.71% in November 2025, driven largely by a rebound in vegetable prices. Citi expects CPI inflation to rise to 1.6% in December 2025 and forecasts FY26 average headline inflation at 2.0%.

Looking ahead, the brokerage cautioned that after an exceptional year of very low inflation, some mean reversion could emerge in 2026 as the lagged effects of cyclical stimulus feed through.

Even so, Citi forecasts another year of below-target inflation in FY27, with headline CPI averaging 3.8%. It added that the growth-inflation mix should allow the RBI to maintain a pro-growth stance without being forced into tightening.

Elara Capital said headline CPI stayed below 1% for the second straight month, printing at 0.71% year on year versus 0.25% in October. Core CPI eased to 4.3%, led by moderation in clothing, footwear and household durables.

Elara expects headline CPI to undershoot the RBI’s FY26 estimate of 2% by 15–20 basis points and sees inflation remaining below 4% in first quarter of the next fiscal. It reiterated its view of one more 25 bp rate cut in FY26, taking the terminal repo rate to 5.0%.

On a month-on-month basis, CPI rose 0.5% in November after a 0.2% decline previously, driven by eggs, meat and spices, while vegetable prices rose 2.6% after two months of correction.

PhillipCapital said headline inflation staying below 1% was in line with expectations and likely to remain contained in the near term. CPI stood at 0.71% year on year, compared with 0.25% in October and 5.5% a year ago.

Sequentially, prices rose 30 basis points versus 15 basis points previously. Core CPI eased to 4.3% from 4.4%, while services inflation moderated sharply to 0.2% month on month from 0.8%, aided by slower increases in personal care prices linked to softer gold momentum. Overall, PhillipCapital said the inflation path keeps the door open for a 25 bp rate cut in February 2026.