India’s retail inflation jumped to 6.09% in October 2026, crossing the Reserve Bank of India’s upper tolerance limit of 6% for the first time in two years. A sharp rise in food prices, restaurant services and transport costs drove inflation higher, raising expectations of another RBI rate hike in December.
New Delhi, November 12 — India’s retail inflation surged to 6.09% in October 2026, breaching the Reserve Bank of India’s upper tolerance limit for the first time in two years, according to data released by the Ministry of Statistics & Programme Implementation.
Consumer Price Index (CPI)-based inflation had stood at 5.54% in September.
A sustained increase in food and beverages, restaurant services and transport costs played a major role in pushing the headline inflation rate above the RBI’s 6% upper tolerance threshold.
Food inflation jumps to 8.94%
Food inflation increased sharply to 8.94% in October from 7.74% in September.
Of the 12 categories covering food items and services, 11 recorded an increase in inflation.
Inflation in restaurant and accommodation services stood at 10.06%, while food and beverages inflation was 8.51%. Personal care and miscellaneous goods and services recorded inflation of 10.14%.
Among individual items, onion prices surged 116.22%, the highest increase cited in the data.
Garlic inflation stood at 60.74%, silver jewellery at 52.39%, ginger at 48.32% and lemon at 47.30%.
First breach of 6% in two years
This is the first time in two years that headline retail inflation has crossed the RBI’s upper tolerance band.
The central bank is mandated to maintain inflation within a 2-6% range. Retail inflation had last breached the 6% mark in October 2024, when it stood at 6.25%.
The latest inflation reading has increased expectations of another interest-rate hike.
The RBI raised its benchmark policy rate by 25 basis points to 5.50% in October, its first rate hike in nearly four years.
Another rate hike expected in December
DBS Bank Senior Economist and Executive Director Radhika Rao said the latest data reinforces expectations of a second consecutive rate hike in December.
ICRA also expects food and beverages inflation to remain above 8% in November, with milk, sugar and onions contributing to price pressures.
Deficient monsoon conditions and inadequate replenishment of reservoir levels have also raised concerns about the rabi crop outlook.
ICRA Chief Economist Aditi Nayar said another 25-basis-point rate hike in December appears almost certain if inflation remains above the RBI’s tolerance ceiling.
The October inflation data will be a key input for the RBI Monetary Policy Committee’s December 2-4 meeting.
Economists also warned that elevated inflation combined with higher borrowing costs could affect household purchasing power, consumption and housing affordability in the coming months.
