India's retail inflation hits 6.09% in October, above the RBI's limit; food at 8.94%

Reports said inflation has more than doubled from 2.74% in January 2026. The general index stood at 110.05 and the food index at 113.23. The ministry's field staff collected prices weekly from 1,407 urban markets, including online markets, and 1,465 villages across the country, and the response rate was 100% in both rural and urban markets.

The rural gap is wider than the urban one. Food inflation was 9.09% in rural areas, up from 8.06%, and 8.68% in urban areas, up from 7.18%. Food and beverages as a group rose 8.51%. Among states with more than 50 lakh people, Tamil Nadu recorded the highest rate at 7.29%, followed by Telangana at 7.26% and Andhra Pradesh at 7.25%.

The items behind the number

Onions were the steepest, at 116.22% a year earlier, up from 108.13% in September. Garlic rose 60.74%, ginger 48.32% (down from 62.85%) and lemons 47.30%. Silver jewellery rose 52.39%, easing from 87.82% in September. Prices of some vegetables fell: potatoes were 14.24% cheaper than a year earlier, cauliflower 10.57%, coconut 5.60%, brinjal 3.34% and cabbage 1.92%.

By category, personal care, social protection and miscellaneous goods and services was highest at 10.14%, followed by restaurants and accommodation at 10.06% and food and beverages at 8.51%. Transport was 5.84%, clothing and footwear 4.96%, education services 4.02% and furnishings and household equipment 3.94%. Information and communication was 3.16%, housing and utilities 2.90%, recreation 2.52% and health 2.05%, the lowest listed. That pattern shows an inflation rate pulled up mainly by food and by eating out, with housing, health and communication still below 4%.

The ministry's price collectors record fuel at a fixed reference date each month, so the large rise in the price of milk that begins on 12 November, when Amul and Mother Dairy raise prices by Rs 2 to Rs 4 a litre, will not appear until the November figures. The next release, for November, is scheduled for 14 December.

The month-on-month move shows where the pressure sits. Food inflation rose by 1.20 percentage points in a single month, from 7.74% to 8.94%, while headline inflation rose by 0.55 points, from 5.54% to 6.09%. In other words, food accounts for most of the rise, and the rest of the basket moved far less.

What economists expect from the RBI

The Reserve Bank's Monetary Policy Committee raised the repo rate by 25 basis points to 5.50% on 7 October and moved to a stance of calibrated tightening. The bank targets inflation of 4% with a tolerance band of 2% to 6%.

Radhika Rao, senior economist at DBS Bank, said headline inflation has not yet peaked, that the unfavourable base effect adds to the pressure, and that she expects the RBI to revise its quarterly inflation projection higher and raise rates a second time in December. Tanay Dalal, senior vice president for business economic research at Axis Bank, said the data raise the risk that policy rates may need to go above the estimated neutral rate of 6%. Anil Gupta, president of the PHD Chamber of Commerce and Industry, said the food component needs close monitoring because of its weight in household spending.

Earlier forecasters had set out the path. Bloomberg Economics expected rate rises in December and February, Nirmal Bang about 50 basis points over two meetings, and BofA Securities 75 basis points over six to nine months. For borrowers, another rise would lift the cost of loans tied to the repo rate, including many home loans, at their next reset. The central bank's decision will depend on the broader outlook and growth, as well as on whether food prices ease. Growth has been strong: economists estimate July to September growth above the RBI's own estimate of 7.2%, which gives the committee room to tighten.

The Federal Reserve also raised its benchmark rate by a quarter point in September, so India's central bank is moving in a global climate of higher rates. For households, the immediate effect is at the market stall, where onions, garlic and the cost of eating out are rising fastest.