Why India’s inflation is so low in 2025

India’s inflation has eased sharply and the latest data for November shows this clearly. Headline CPI inflation in November 2025 was about 0.7 percent year on year, only slightly higher than October’s 0.25 percent and still far below the 4 percent RBI target band. So, households are seeing much slower price increases than in 2022 and 2023.

First, the breakdown of November numbers gives useful insight. Food inflation in November stayed near zero on a yearly basis, after being negative in some earlier weeks, because vegetable and cereal prices were soft while pulses and some spices stayed costly. Core inflation, which leaves out food and fuel, remained around 3 to 3.5 percent, continuing the low trend seen through FY24 and FY25. This mix explains why overall inflation is low even when a few items still pinch.

Next, policy and global trends support these November outcomes. RBI raised the repo rate from 4 percent in early 2022 to a peak of 6.5 percent by mid-2024, which helped anchor inflation initially, before implementing multiple cuts through 2025, from 6.25 percent in February, to 6 percent in April, 5.5 percent in June, and finally 5.25 percent in December, to bolster growth amid easing price pressures. At the same time, softer world crude and commodity prices and regular releases from domestic food buffer stocks helped keep November inflation anchored near 1 percent instead of the 6 to 7 percent levels seen right after the pandemic.