India's Oct retail inflation peaks 12-month record to 6.2%

This reading exceeded the Reserve Bank of India’s (RBI) upper target band of 6% for the first time in over a year.

The breach has heightened concerns that the RBI may refrain from cutting rates at its December meeting for the eleventh consecutive time.

On November 6, RBI Governor Shaktikanta Das had cautioned that October's inflation rate is expected to exceed the 5.5% recorded in September.

Vegetable inflation surged to a nearly five-year high of 42.4% in October, with tomato inflation soaring to 161.3% compared to 42.9% in September. Garlic, potato, and onion inflation also remained high, at 82.5%, 64.9%, and 51.8%, respectively.

Inflation in India has seen recent volatility, primarily due to rising food costs. September's inflation rate was propelled by a 36% year-on-year surge in vegetable prices and a food inflation rate of 9.24%.

Additionally, the government’s customs duty on oil drove refined oil prices up by 10.4% in October, reversing a 0.3% deflation in September, while coconut oil inflation increased to 34.5% from 23.9%. However, there was some relief as pulses inflation fell to a 17-month low of 7.4%, and rice inflation dropped to a 26-month low.

Core inflation also rose in October, influenced by higher gold prices.

Looking forward, Das warned of “significant upside risks to inflation” from global geopolitical tensions, fluctuating commodity prices, and climate impacts.