India's Inflation Woes: Food Prices Soar Beyond Expectations

India's retail inflation hit 6.21% in October, surpassing the RBI's threshold. Food inflation reached 10.87%, driven by vegetables at 42.18%. Urban and rural rates varied, with housing inflation slightly rising. Despite a dramatic decline in some sectors, policymakers struggle to align inflation with their 4% target.

India's retail inflation in October surged to 6.21%, breaching the Reserve Bank of India's upper limit of 6%. According to the Ministry of Statistics and Programme Implementation, food inflation peaked at 10.87% with vegetable prices skyrocketing to 42.18%.

Rural and urban inflation rates stood at 6.68% and 5.62% respectively, while housing inflation for urban areas recorded a slight uptick from 2.72% in September to 2.81% in October 2024. Despite a notable reduction in specific subgroups like pulses, eggs, and sugar, food inflation remains troublesome due to rising vegetable, fruit, and oil prices.

August witnessed one of the lowest retail inflation rates in five years at 3.65%, but it has been climbing since. India's policymakers aim for a stable retail inflation target of 4%, but current figures highlight the ongoing challenge. The RBI maintains a repo rate of 6.5% to control inflation while closely monitoring agricultural developments and constructing future strategies.

(With inputs from agencies.)