October retail inflation in India is likely to have crossed the Reserve Bank of India’s upper tolerance limit of 6%, two separate polls of economists show. If the estimates hold, it would be the first time since October 2024 that headline inflation has breached the 6% mark, and it would put the central bank under fresh pressure just weeks before its December policy meeting.
A Business Standard poll of 11 economists, published late on Monday night, puts the median estimate for October consumer price inflation at 6.05%. The forecasts in that poll range from 5.9% to 6.11%. A Reuters poll of 36 economists, conducted between November 2 and 6, points in the same direction, with a median forecast of 5.93% and nearly half of those polled expecting a reading at or above 6%.
The official number will settle the question. The National Statistics Office is scheduled to release the October CPI data on November 12, and that print will be the last full inflation reading the RBI’s Monetary Policy Committee sees before it meets on December 2 to 4.
Food prices are doing the damage
Food is the main culprit. Food prices account for nearly 40% of India’s consumer price index, and they have risen sharply in recent months after an uneven and deficient monsoon reduced supplies of key household staples.
The Reuters poll expects food inflation to have picked up to 8.20% in October, from 7.74% in September. September’s headline inflation had already climbed to 5.54%, up from 4.8% in August, with food inflation running hot through the festive season.
Economists also point to an unfavourable base effect. Last year’s GST rate rationalisation pushed prices down in the comparable period, so even a normal October looks worse against that low base. The combination of dearer food and a weak base is what has pushed the forecasts over the line.
For households, the numbers translate into something very ordinary: vegetables, milk and pulses costing more at the neighbourhood shop, and monthly budgets stretching thinner. Inflation has now stayed above the RBI’s 4% medium-term target for four consecutive months.
What this means for interest rates
The RBI raised the repo rate by 25 basis points to 5.50% on October 7, a unanimous decision by the Monetary Policy Committee. At the time, the central bank projected inflation averaging 5.2% for the current financial year, with the third quarter itself seen at 6.0%, right at the edge of the tolerance band.
An October print above 6% would strengthen the case for a second straight hike in December. Economists polled by Reuters last month widely expect the repo rate to rise to 5.75% at the December meeting. A higher repo rate makes loans costlier for banks, and eventually for home, car and business borrowers, but it is the RBI’s main tool for cooling demand-driven price pressure.
That said, the central bank will also weigh growth. The economy grew 7.8% in the April to June quarter, and the finance ministry’s October monthly review estimates July to September growth at 7.35%. October GST collections rose 22.9% year on year to a record Rs 2.31 lakh crore. The RBI’s own October projection puts full-year growth at 7.1%, revised up from 6.7% in August.
The tension is familiar: growth is holding up, but food prices are not behaving. The MPC’s December decision will depend heavily on whether the November 12 data confirms the polls, and on whether food prices start easing as fresh winter supplies reach the markets.
What to watch next
- November 12: NSO releases October CPI inflation. A print above 6% confirms the breach; below 6% would ease rate-hike pressure.
- Late November: November food prices and mandi arrivals will show whether the festive-season spike is fading.
- November 30: GDP data for the July to September quarter, which will frame the growth side of the December debate.
- December 2 to 4: The MPC meets, with a second rate hike widely expected if inflation stays hot.
FAQs
What is the RBI’s inflation target?
The RBI targets consumer price inflation of 4%, with a tolerance band of 2% to 6%. A reading above 6% counts as a breach of the upper limit.
When will the official October inflation figure be released?
The National Statistics Office will publish the October CPI data on November 12, 2026.
Why is inflation rising now?
Food prices are the main driver, after an uneven monsoon hit supplies of staples. An unfavourable base effect from last year’s GST rate changes is also pushing the year-on-year figure up.
Will the RBI raise rates again in December?
Economists widely expect a second straight hike, to 5.75%, if the October data confirms inflation above 6%. The MPC meets from December 2 to 4.
What was the last inflation reading?
September CPI inflation was 5.54%, up from 4.8% in August. The repo rate currently stands at 5.50% after the October 7 hike.
The November 12 data will tell India whether October was a one-month spike or the start of a harder winter for prices. Either way, the RBI’s December meeting just became the most watched date on the economic calendar.
