India's retail inflation climbed to 6.09% in October 2026, crossing the Reserve Bank of India's (RBI) upper tolerance limit of 6% for the first time in two years. According to provisional data released by the Ministry of Statistics and Programme Implementation (MoSPI), the increase from 5.54% in September was driven primarily by higher food prices. 

Key Highlights

• India's retail inflation rose to 6.09% in October 2026, breaching the RBI's upper tolerance limit for the first time in two years.
• Food inflation accelerated to 8.94%, with onion and garlic prices recording annual increases of 116.22% and 60.74%, respectively.

Overall, inflation was 6.09% year-on-year in October (up from 0.25% one year earlier) with the revised base year for the Consumer Price Index (CPI) in both periods taken as 2024. Rural inflation kept increasing to 6.63% and urban inflation to 5.41%.

The latest reading of CPI inflation in October will be the 12th monthly rise in a row, taking inflation beyond the RBI's target range of 2-6%. The central bank wants to keep retail inflation at 4% and allow a 2% point tolerance.

Food Inflation Climbs to 8.94% in October

The increase in retail inflation was mainly attributed to food prices. Inflation in the Consumer Food Price Index (CFPI) stood at 8.94% in October, up from 7.74% in September.

Food inflation in rural areas was 9.09% and it was 8.68% in urban areas. Inflation for food and beverages in general increased by 8.51% for the month.

In the case of individual food items, onion was the worst performer with October prices rising at a double-digit rate of 116.22%, up from 108.13% in September. The price of garlic rose by 60.74% compared with the corresponding period of 2008, when it had risen by 54.62%.

Prices of ginger witnessed some easing with inflation decreasing to 48.32% in October down from 62.85% in September. In contrast, potato prices dipped 14.24% year-on-year, whereas cauliflower prices witnessed a decrease of 10.57%. Brinjal and Cabbage also showed a decrease in prices year-on-year.

Economists Expect Inflation to Remain Above 6%

Economists have flagged the possibility of elevated inflation in the coming months, citing food prices, unfavourable base effects and the potential pass-through of higher commodity costs.

Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said the October headline inflation reading was expected to exceed 6%. She anticipates the next few readings to remain above the RBI's upper tolerance limit, partly due to the adverse base effect following GST changes, higher food prices and the partial transmission of increased commodity prices.

Upasna Bhardwaj also expects the RBI to raise interest rates by another 50 basis points in FY27, with further upside risks if food inflation intensifies or global oil prices reverse their recent decline.

Radhika Rao, Senior Economist and Executive Director at DBS Bank, said the sharp food-driven increase was accompanied by signs of broader price pressures. She expects the RBI's quarterly inflation projection to be revised upwards and said the October data reinforces her expectation of a second consecutive rate hike in December.

October CPI Data to Influence RBI's December Policy Decision

The October inflation reading is the last CPI data available to the RBI ahead of its December 4 monetary policy decision. The central bank has projected inflation at 6% for the third quarter of FY27.

RBI Governor Sanjay Malhotra has also flagged risks to agriculture and rural demand from weak monsoon conditions and a strong El Nino.But if adequate foodgrain stocks and government interventions could help to mitigate, he said.

Meanwhile, crude futures are down to about $92 per barrel, providing some respite for the inflation forecast. But the US-Iran conflict and shipping through the Strait of Hormuz continue to be significant issues for global oil prices.

Also Read: WPI Inflation Rises to 11.39% in Sept; Retail Inflation at 5.54%

CPI Base Year Revised to 2024

On 12th February 2026, the Government of India has announced the revision of the base year of the Consumer Price Index from 12th January 2012 to 01st January 2024. The new index has replaced the old basket of goods and services with a new one that more closely reflects the changes in household consumption patterns.

For October 2026, MoSPI collected price data from 1,407 urban markets, including online markets, and 1,465 villages across states and Union Territories. The ministry found that 100% of the rural and urban markets responded.

The latest figures of the inflation show the added burden on food costs and the dilemma of monetary policy makers on the need for further rate hikes to ensure inflation stays within the RBI's 2-2.5% target range.