Retail Inflation Rises To 0.71% In November, Below RBI Target Of 2-6%

India's annual retail inflation quickened to 0.71 per cent year-on-year in November, picking up from a record low in October, as the pace of decline in food prices slowed, government data showed on Friday.

A Reuters poll had projected retail inflation at 0.7 per cent. The latest print was below the Reserve Bank of India's target range of 2 per cent to 6 per cent for the third straight month.

Commentary:

Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, Mumbai

"While the inflation trajectory is expected to move upward from here on, we see the trajectory fairly benign until H1 FY27.

Going ahead, with the RBI having kept additional actions data dependent, we see some room for 25 bps repo rate cut. However, the rate-cutting cycle is clearly nearing the end, followed by a prolonged pause."

Garima Kapoor, Economist, Institutional Equities, Elara Securities, Mumbai

"Amid continued pass-through of GST cuts and led by softer food prices, India CPI inflation posts yet another sub 1 per cent reading.

Headline CPI for FY26 will likely undershoot RBI's estimate by 15-20 basis points. With visibility of the print remaining below 4 per cent in Q1 FY27, we believe the room for another 25 bps rate cut is still open."

Sakshi Gupta, Principal Economist, HDFC Bank, Gurugram

"Inflation inched up in November to 0.71 per cent on the back of a slight increase in vegetable prices and as the impact of a favourable base faded."

"October was the lowest print on inflation seen in recent years and inflation is now expected to inch up over the coming months as the base effect turns."

"That said, given the impact of GST rate cuts as well as ample food supply, inflation is expected to average below 3 per cent in the remaining part of FY26 and below 4 per cent in H1 FY27. This should provide room for the RBI to deliver another rate cut in the Feb policy as growth shows signs of losing momentum post the festive season."

"We expect inflation to average at 1.8 per cent in FY26 and 3.8-4 per cent in FY27."

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