Archive · 16 Sep 2025
India's Inflation Cools Amidst Global Disinflationary Trends
India's inflation has decreased, putting it in line with other Asian countries.
Inflation is now within the government's target range.
This drop is partly because of global factors like lower oil costs and weak demand.
China's economic slowdown and declining prices also play a role, impacting imports.
Tax cuts also helped keep prices down.
Experts are watching how upcoming changes may further influence inflation, and anticipating possible interest rate changes from the Federal Reserve.
India is experiencing a disinflationary trend in 2025, with inflation at the lower end of the target band.
Several Asian economies, including India, are experiencing disinflation or deflation.
Weak demand and overcapacity have led to a crash in prices in China.
GST rate cuts could exert a downward pull on inflation.
The RBI may consider interest rate cuts following potential easing by the US Federal Reserve.
- Who
- India
- What
- Experiencing disinflation with inflation at the lower end of the target band.
- When
- 2025
- Where
- India
- Why
- Due to lower oil prices, weak demand, and Chinese deflation
RBI's Current Stance
Economists' Perspective
RBI's Focus
RBI's Current Stance
RBI focuses on one-year-ahead expected inflation to decide policy rates.
Economists' Perspective
Economists believe the one-year-ahead inflation policy is misplaced in the evolving global landscape.
- India's Inflation Target
- 2-6%
- China's PPI Deflation
- Since September 2022
- GST Rate Cuts Impact
- Could exert a downward pull of as much as 1 percentage point on inflation
- Expected 2025-26 Inflation
- Approximately 2.5%
Sources
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