India’s retail inflation rose to 6.09 per cent in October, breaching the Reserve Bank of India’s upper tolerance limit of 6 per cent for the first time in two years, official data released on Thursday showed.

The figure, measured by the Consumer Price Index, was up from 5.54 per cent in September, a rise of 55 basis points, according to data from the Ministry of Statistics and Programme Implementation. It is the highest reading since October 2024, when inflation stood at 6.21 per cent.

The increase puts price pressures firmly back at the top of India’s economic agenda, just weeks before the central bank’s next interest-rate decision.

Food prices drive the surge

Food inflation was the main force behind the rise, accelerating to 8.94 per cent in October from 7.74 per cent in September.

Onion prices recorded inflation of 116.22 per cent in October, while garlic rose 60.74 per cent, ginger 48.32 per cent and lemon 47.30 per cent. Silver jewellery, at 52.39 per cent, was also among the five items with the highest inflation.

Restaurant and accommodation services recorded inflation of 10.06 per cent, underlining how price pressures have spread beyond the grocery basket into services that households use every day.

Rural India felt the squeeze more sharply than towns and cities. Inflation in rural areas rose to 6.63 per cent in October from 6.08 per cent in September, as food costs weighed heavily on household budgets.

Above the central bank’s comfort zone

The Reserve Bank of India is mandated to keep retail inflation at 4 per cent, within a tolerance band of 2 per cent to 6 per cent. The October reading is the first time in two years that inflation has broken through the top of that band.

The central bank raised its benchmark repo rate by 25 basis points to 5.50 per cent at its October policy review, its first rate rise in nearly four years, and signalled that further increases could follow amid rising inflation, a weak rupee and high crude oil prices.

The October figures will be a key input for the Reserve Bank’s Monetary Policy Committee, which next meets from 2 to 4 December. The central bank has projected average inflation of 6 per cent for the October to December quarter.

How the numbers were gathered

The ministry said prices were collected from 1,407 selected urban markets, including online markets, and 1,465 villages across all states and union territories, through field visits by the National Statistical Office. The response rate for October was 100 per cent in both rural and urban markets.

The figures are provisional and are based on the Consumer Price Index with 2024 as the base year. The combined index rose to 110.05 in October from 109.49 in September.

The ministry said the next inflation reading, for November, is scheduled for release on 14 December.

What it means for households

For households, the October data confirms what many shoppers have already felt at the market: staple vegetables have become sharply more expensive in a matter of weeks, with onion prices more than doubling compared with a year earlier.

With inflation now above the central bank’s tolerance band and the December policy meeting approaching, attention will turn to whether the Reserve Bank decides to raise rates again to bring price growth back under control.