- India's retail inflation rose to 6.09% in October, exceeding RBI's 6% limit
- October inflation is the highest in two years and first breach since Oct 2024
- Food prices drove inflation, with onion prices up 116.22% year-on-year
India's retail inflation rose to 6.09% in October from 5.54% in September, breaching the Reserve Bank of India's upper tolerance limit of 6% and coming in slightly above market estimates of 6%. This is the highest inflation reading in about two years and the first time the headline number has crossed the RBI's comfort band since October 2024.
It is also the highest print under the new Consumer Price Index series, which has a 2024 base year and was introduced in January this year.
Inflation has now risen every single month in 2026, climbing steadily from 2.74% in January, a ninth straight monthly increase under the new series. The government has mandated the RBI to keep retail inflation at 4%, within a band of 2% to 6%, until March 2031. With the October reading above that band, the print adds pressure on the central bank ahead of its December policy review.
Food prices were the main driver behind the uptick in inflation. The Consumer Food Price Index-based inflation rose to 8.94% in October from 7.74% in September, with rural food inflation at 9.09% and urban at 8.68%, as per a release issued by the Ministry of Statistics and Programme Implementation. Onion prices led the surge, rising 116.22% year-on-year, more than double last October's level.
Garlic was up 60.74%, ginger 48.32% and lemon 47.30%. Vegetables such as potato (−14.24%), cauliflower (−10.57%) and brinjal (−3.34%) were cheaper than a year ago, but that was not enough to offset the rise.
The price pressure was also broad-based, with rural inflation climbing to 6.63% from 6.08%, and urban inflation rising to 5.41% from 4.88%.
Among spending categories, restaurants and accommodation services saw inflation of 10.06%, food and beverages 8.51% and transport 5.84%. Personal care and related items, which include jewellery, rose 10.14%. Silver jewellery inflation eased sharply, to 52.39% from 87.82% in September.
ALSO READ: SBI MF Thinks Inflation Could Stay Near 6% For Next 9 Months. 3 Reasons Why
Geographically, southern states felt the heat the most. Tamil Nadu recorded the highest headline inflation among large states at 7.29%, followed by Telangana (7.26%), Andhra Pradesh (7.25%), Madhya Pradesh (7.19%) and Odisha (7.17%).
Andhra Pradesh topped the food inflation chart at 13.23%, ahead of Tamil Nadu (12.37%), Karnataka (12.16%), Telangana (11.66%) and Kerala (10.92%).
A day before the October inflation data came out, SBI Mutual Fund warned that price pressures could persist. In its November 2026 Market Outlook, the fund house said headline CPI is expected to average almost 5.8% over the next three quarters, and inflation “could remain near 6% over the next three quarters with a material risk of breaching the 6% threshold.” It cited three risks, with foremost being weather as the monsoon has ended 12.6% below normal and a strong El Niño is expected through January–March 2027; delayed price increases by consumer companies; and possible petrol and diesel hikes if crude rates do not moderate.
ALSO READ: Milk, Ghee, Soap, Cigarettes: India's Price Hike List Keeps Growing As Inflation Bites
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.