Retail inflation cools to 0.25% in October on GST cuts, low food prices

October CPI-based inflation: India's food inflation dropped sharply in October, falling to -5.02 per cent from -2.28 per cent in September

India’s retail inflation, measured by the Consumer Price Index (CPI), cooled to 0.25 per cent in October, from 1.54 per cent in September, according to the data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Wednesday.

 

The drop in inflation in October was mainly due to record-low food prices and the impact of the recent Goods and Services Tax (GST) cuts, which eased prices across several sectors.

 

The headline inflation had dipped in September after a slight increase in August, which marked the first monthly rise in inflation in 10 months.

Food inflation remains negative

India’s food inflation dropped sharply in October, falling to -5.02 per cent from -2.28 per cent in September. In rural areas, it was -4.85 per cent, and in urban areas, it stood at -5.18 per cent. The food inflation in October is the lowest of the current CPI series. 

 

 

The decline in both overall and food inflation was mainly due to a favourable base effect and a fall in prices of vegetables, oils and fats, fruits, footwear, cereals and products, and transport and communication.

Sector-wise CPI inflation

Housing inflation for October 2025 stood at 2.96 per cent, slightly lower than 2.98 per cent in September. The housing index covers only the urban sector. Meanwhile, education inflation for both rural and urban areas rose marginally to 3.49 per cent in October from 3.44 per cent in September.

 

Health inflation eased to 3.86 per cent in October from 4.39 per cent during the last month, showing a slight decline in healthcare costs. Prices in the transport and communication sector dropped to 0.94 per cent in October from 1.82 per cent in September, indicating lower costs in this category. Inflation in fuel and light remained unchanged at 1.98 per cent in both October and September.

State-wise Inflation

The highest inflation was recorded in Kerala at 8.56 per cent in October, unmatched by any other state, though it dipped from 9.05 per cent in September. The second-highest inflation was much lower, at 2.95 per cent in Jammu and Kashmir, followed by 2.34 per cent in Karnataka.

 

States that showed deflationary trends included Delhi, Assam, and Jharkhand, with Bihar recording the lowest inflation at -1.97 per cent in October, followed by Uttar Pradesh at -1.71 per cent and Madhya Pradesh at -1.62 per cent.

GST rate cuts

On September 3, Finance Minister Nirmala Sitharaman announced a revamped GST structure, simplifying it into two main slabs, including 5 per cent and 18 per cent. Most daily-use items, such as stationery and dairy products, were moved to the lower 5 per cent bracket, effective September 22.