India's Retail Inflation Rises to 0.71% in November: Below RBI Target Range for Third Consecutive Month

Retail inflation decelerated to its lowest point in over 8 years, reaching 1.54% in September.

India's annual retail inflation increased to 0.71 per cent year-on-year in November, rising from a historic low in October, as food price decreases moderated, according to government data released Friday.

A Reuters survey had forecast retail inflation at 0.7 per cent. The latest figure remained below the Reserve Bank of India's target corridor of 2 per cent to 6 per cent for the third consecutive month.

Commentary from Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, Mumbai: "While inflation is expected to trend upward from this point, we anticipate a relatively benign trajectory until H1 FY27.

With the RBI maintaining a data-dependent approach for additional actions, we believe there remains potential for a 25 bps repo rate reduction. However, the rate-cutting cycle is clearly approaching its conclusion, to be followed by an extended pause."

Garima Kapoor, Economist for Institutional Equities at Elara Securities, Mumbai: "With continued implementation of GST cuts and influenced by softer food prices, India's CPI inflation delivers another reading below 1 per cent.

Headline CPI for FY26 will likely underperform RBI's projection by 15-20 basis points. With the print expected to remain under 4 per cent in Q1 FY27, we believe opportunity for another 25 bps rate reduction remains viable."

Sakshi Gupta, Principal Economist at HDFC Bank, Gurugram: "Inflation edged higher in November to 0.71 per cent driven by a slight rise in vegetable prices and the diminishing impact of a favorable base."

"October represented the lowest inflation reading in recent years, and inflation is now projected to increase over the coming months as the base effect diminishes."

"Nevertheless, given the impact of GST rate reductions and sufficient food supply, inflation is expected to average below 3 per cent for the remainder of FY26 and below 4 per cent in H1 FY27. This should create room for the RBI to implement another rate cut in the February policy as growth shows signs of slowing after the festive season."

"We project inflation to average 1.8 per cent in FY26 and 3.8-4 per cent in FY27."