Retail inflation in India has dropped to a historic low of 0.25% in October 2025, according to government data released on Wednesday. This figure marks the lowest inflation rate recorded since the current Consumer Price Index (CPI) series began in 2015, which uses 2012 as the base year. The decline is primarily attributed to a significant fall in food prices and the recent reduction in Goods and Services Tax (GST) on essential goods.

The Consumer Food Price Index (CFPI) also reflected a year-on-year inflation rate of -5.02% for October, with rural and urban rates at -4.85% and -5.18%, respectively. This represents a notable decrease of 269 basis points in food inflation compared to September. The government noted that the full impact of the GST reduction, which was implemented in late September, has been felt across various sectors, contributing to the overall decline in inflation.

Food prices saw substantial drops, particularly in vegetables, which fell by 27.57%, following a 21.38% decline in the previous month. Other categories such as oils, fats, fruits, and cereals also experienced reduced inflation rates. The easing of inflation is expected to relieve pressure on household budgets and may support continued policy measures to boost consumption.

In the rural sector, headline inflation was recorded at -0.25% in October, down from -1.07% in September. Urban areas also saw a decrease, with headline inflation falling from 1.83% in September to 0.88% in October. The overall trend of declining inflation is being closely monitored by economists, especially in light of global price fluctuations and the upcoming festive season demand.