India’s retail inflation rose to 0.71% YoY in November 2025 from a series low of 0.25% YoY in the previous month. Higher food prices primarily drove the uptick in inflation.

Food inflation increased to -2.8% YoY in November 2025 from -3.7% YoY in October. Within the food basket, vegetable inflation increased to -22.2% YoY from -27.6% YoY a month earlier. The increase in vegetable prices was the key driver behind the rise in headline CPI inflation.

Core inflation (which excludes food and fuel) remained flat at 4.4% YoY in November 2025. Excluding gold and silver, core inflation was 2.4% YoY, indicating that underlying inflationary pressures remain low.

We expect inflation to remain anchored around 4% target in FY27. However, weak growth in kharif production and a sustained rise in precious metal prices pose upside risks to inflation.

We believe the rate-cut cycle is nearing its end. While supportive growth and inflation dynamics could allow for one final 25 bps cut, that would likely conclude the cycle.

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