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India’s retail inflation is expected to decline further in October 2025, supported by the combined effects of a high base, delayed seasonality in food prices, and the continued impact of recent Goods and Services Tax (GST) reforms, according to a report by Union Bank of India, as reported by ANI. The report said inflationary pressures are likely to stay mild over the next few months. “Our projection for October CPI is tracking below 0.50 per cent as on date. Food inflation too is expected to fall sharply in October and continue to be in the negative zone during the coming winter months, with the impact of floods muted,” the bank noted.

The bank’s assessment comes after inflation eased sharply to an eight-year low, driven by lower food prices and the rationalisation of GST rates. The Consumer Price Index (CPI) inflation forecast for FY26 has been revised down to 2.6 per cent from 3.1 per cent earlier, with inflation expected to remain below the Reserve Bank of India’s 4 per cent target for most of the year.

In September, the Consumer Price Index (CPI), which tracks retail prices of goods and services, showed a noticeable decline from the previous month. The Consumer Food Price Index (CFPI) came in at -2.28 per cent, reflecting a steady fall in food prices since June 2025.

Rural inflation was recorded at 1.07 per cent, while urban inflation was slightly higher at 2.04 per cent. Food inflation remained negative in both segments, at -2.17 per cent in rural areas and -2.47 per cent in urban areas, largely driven by lower prices for vegetables, edible oils, and other essentials.

The government has attributed the recent dip in inflation to a “favourable base effect” and lower prices in key food categories such as vegetables, oils and fats, fruits, cereals, pulses, eggs, and fuel and light. Economists say this moderation brings some relief to households and improves the inflation outlook for policymakers. At the same time, they caution that prices could see a slight uptick towards the end of the financial year as the base effect fades and festive demand rises. Overall, however, the trend points to continued price stability, supported by policy measures, better supply chains, and the ongoing benefits of GST reforms.