Retail Inflation Hits 24-Month High Of 6.09%, Food Prices Push It Past RBI’s 6% Ceiling

New Delhi: India’s retail inflation climbed to a 24-month high of 6.09 percent in October 2026, breaching the Reserve Bank of India’s 6 percent upper tolerance limit ahead of its December monetary policy meeting.

Inflation measured by the Consumer Price Index rose 55 basis points from 5.54 percent in September, according to data released by the Ministry of Statistics and Programme Implementation on Thursday. The October reading was the highest since October 2024, when inflation stood at 6.21 percent.

Food prices climb

Food prices drove the rise in overall inflation. Food inflation rose by 1.20 percentage points to 8.94 percent in October from 7.74 percent in September. The increase was particularly sharp for onions and garlic.

Onion inflation accelerated to 116.22 percent from 108.13 percent, while garlic inflation increased to 60.74 percent from 54.62 percent. Ginger and lemon prices rose 48.32 percent and 47.30 percent, respectively.

The RBI’s assessment of recent price trends pointed to dwindling onion stocks and uneven rainfall, which affected the arrival of fresh kharif crops. Rural food inflation reached 9.09 percent, while urban food inflation stood at 8.68 percent.

Rural inflation outpaces urban

Overall rural inflation rose to 6.63 percent from 6.08 percent in September. Urban inflation increased to 5.41 percent from 4.88 percent, leaving the gap between rural and urban readings at 1.22 percentage points in October.

Nationally, inflation in the food and beverages category stood at 8.51 percent. The personal care, social protection and miscellaneous goods and services category recorded inflation of 10.14 percent, while prices in restaurants and accommodation services rose 10.06 percent.

December policy in focus

The RBI targets retail inflation of 4 percent, with a tolerance band of 2 percent to 6 percent. October’s reading was nine basis points above the upper end of that band.

The Monetary Policy Committee is scheduled to meet from December 2 to 4. At its October review, the RBI raised the policy repo rate by 25 basis points to 5.50 percent and shifted its stance to calibrated tightening.

The December meeting will give policymakers their next opportunity to assess how the rise in food prices is feeding into overall inflation.

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