However, a decline in international crude oil prices will help control inflationary pressures going forward, the report states.

The country’s retail inflation in October slowed to a four-month low of 4.87 per cent, falling closer to the RBI’s target of 4 per cent.

The average price of India’s crude oil imports works out to $83.93 a barrel in November so far, down from $90.08 a barrel in October, official figures show.

"The decline in international crude oil prices and continued moderation in core inflation are likely to control inflationary pressures going forward," the monthly report states.

Core inflation, which excludes food and fuel prices, fell to 4.3 per cent in October from 4.5 per cent in September.

The monthly report said that the Reserve Bank of India, which has kept key interest rates on hold for four consecutive policy meetings, has indicated that any further tightening of monetary policy will only occur "if the situation warrants."

However, food inflation has remained elevated at 6.61 per cent and both finance ministry officials and RBI governor have highlighted risks from a spike in food prices.

Global trade is expected to be under pressure owing to a declining world merchandise trade volume as reflected in the WTO's October 2023 Global Trade Outlook and Statistics. Higher imports of oil and gold and the slowdown in exports pushed India's trade deficit in October to a record high.