In October 2025, India marked a significant milestone in its economic landscape as retail inflation plummeted to a decade low of 0.25%. This noteworthy decline was primarily driven by a substantial drop in food prices. Key contributing factors included reductions in Goods and Services Tax (GST), alongside a favorable base effect. Across the country, both rural and urban regions experienced a decrease in inflation rates, marking a positive economic development.

According to government reports, the Consumer Price Index (CPI) inflation for October showcased a significant drop of 119 basis points compared to the previous month, thereby recording the lowest year-on-year inflation in the current CPI series. The All India Consumer Food Price Index (CFPI) reflected a provisional year-on-year inflation rate of -5.02% in October 2025, compared to its level a year prior in October 2024. In detailing the widespread impact, the rural areas reported a CFPI-based food inflation of -4.85%, while urban territories noted a slightly higher reduction at -5.18%.

Food prices saw a dramatic decrease of 269 basis points from September to October 2025, affirming the current CPI series’ lowest inflation metrics. This remarkable reduction in both headline and food inflation can be linked to several factors, including the complete effect of GST reductions, notable base effects, and reduced prices in various essential categories such as oils and fats, vegetables, fruits, eggs, footwear, cereals, transport, and communication.

Breaking down the numbers, rural areas reported a headline inflation rate of -0.25% in October, improving from -1.07% in September. Similarly, the urban sector recorded a headline inflation drop to 0.88% from 1.83% the previous month. Correspondingly, food inflation in urban areas fell from -2.47% in September to -5.18% in October. The housing inflation rate in urban areas stood at 2.96%, experiencing a marginal decline from 2.98% in September.

Moreover, the combined education inflation rate for rural and urban areas was noted at 3.49% in October, showing a slight increase from September's 3.44%. In contrast, health inflation across both sectors decreased to 3.86%, compared to 4.39% the previous month. This impressive economic improvement signifies a hopeful outlook for India's retail sector and overall economic stability moving forward.