Archive · 13 Nov 2025
Gold Drives India's October Inflation to Record Low, GST Impact Significant
Imagine the prices of things you buy in India.
In October, these prices didn't go up much at all, reaching a super low point!
This happened because food prices dropped, and some taxes (GST) were lowered.
But, the price of gold went up a lot, and this made the overall price increase, called inflation, stay positive.
If you took gold's price out of the picture, prices would have actually gone down!
Experts are seeing that the tax cuts are making things cheaper, perhaps even more than they first thought.
Even though the overall inflation is very low, the high price of gold is making the main inflation number stay positive.
India's retail inflation (CPI) hit a record low of 0.25% in October.
Gold prices significantly increased in October, pushing headline inflation into positive territory.
Excluding gold, India's CPI inflation would have been negative at -0.57%.
Core CPI remained elevated at 4.33% due to gold prices impacting personal care and effects.
GST rate cuts had a considerable impact on inflation, with estimates suggesting a moderation of around 85 bps.
- Who
- National Statistics Office (NSO), SBI research report, HDFC Bank report, Barclays report, government statements, market sources
- What
- India's retail inflation (CPI) reached a multi-year low of 0.25% in October, with gold prices significantly boosting the headline figure. Core inflation remained elevated due to gold, while GST rate cuts had a substantial impact, particularly on food prices.
- When
- October (inflation data)
- Where
- India
- Why
- The record low CPI was driven by the base effect, lower food prices, and the impact of GST rate cuts. However, a significant rise in gold prices pushed the headline inflation into positive territory and contributed to core inflation.
Impact of GST Rate Cuts on Inflation
Perceived Magnitude of GST Impact
Magnitude of GST Impact on Food CPI
Impact of GST Rate Cuts on Inflation
The impact of GST rate cuts on food CPI in October was moderate, with tax cuts mainly affecting processed foods. The full effect is expected to be staggered due to the large unorganized sector and loose packaging of food products.
Perceived Magnitude of GST Impact
The impact of GST rationalization on CPI inflation has been higher than initially estimated, leading to a greater moderation than the expected 65-75 bps, with observed moderation around 85 bps.
Core CPI Inflation excluding Gold
Impact of GST Rate Cuts on Inflation
Core CPI excluding gold stood at 2.6%, indicating that the primary driver of higher core inflation was the price of gold.
Perceived Magnitude of GST Impact
Core CPI did not change much, remaining at 4.33% in October, with gold prices contributing to higher personal care and effects inflation.
- October CPI Inflation
- 0.25%
- September CPI Inflation
- 1.4%
- October CPI Inflation (excluding Gold)
- -0.57%
- October Core CPI Inflation
- 4.33%
- October Core CPI Inflation (excluding Gold)
- 2.6%
- Gold Price Impact on CPI
- Contributed to higher personal care and effects inflation.
- GST Impact on CPI Moderation
- Estimated around 85 bps, higher than initial 65-75 bps.
Sources
India CPI Inflation October 2025 LIVE: Retail inflation seen below 1% on GST rate cuts, cheaper food
Retail inflation plunges to record low of 0.25% in October
CPI Retail Inflation Hits All-Time Low Of 0.25% In October: NSO Data
Retail inflation dips to multi-year low of 0.25% in October
Retail inflation cools to 0.25% in October – Lowest year-on-year rate in current CPI series
India's retail inflation drops to record low in October
India’s Retail Inflation Hits 10-Year Low at 0.25% in October, Driven by Falling Food Prices and GST Cuts
Retail inflation declines to multi-year low of 0.25 per cent in October - Telegraph India
India's Retail Inflation Set to Undershoot RBI Target as Oct CPI Hits Record Low: BOB Report
GST effect: Consumer price inflation rose just 0.25% in October, lowest increase ever
Record low inflation ignites possibility of a repo rate, could have salubrious effect on G-Sec yields
A price-expectations mismatch
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Retail inflation at multi-yr low of 0.25%
Gold rates in Hyderabad today surges, check the rates on 13 Nov, 2025
Gold rates in Delhi today, check the rates on 13 November, 2025
Festive season data lifts India’s economic outlook despite tariff pressures: Report
Gold keeps India’s October retail inflation positive at 0.25% despite GST-led slowdown
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October inflation sees sharp drop – Is it the GST impact? A look at what’s going to be RBI’s next step
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