Consensus expectations are for the first rate cut to come in the second quarter of next year, according to Capital Economics.  India's benchmark repo rate has been unchanged since January, when the central bank increased it by a quarter percent point to 8 percent.  Read MoreIndia keeps interest rates unchanged at 8%  Shah is not alone in his rate outlook.  "The data is in line with our view that the RBI will cut rates in December," Dariusz Kowalczyk, senior economist and strategist, Asia ex. Japan, Crédit Agricole said in a note published after the inflation figures were released.  However, not all economists were convinced the recent let up in price pressures would be enough to make the central bank budge.  "The recent moderation in CPI inflation and our expectation of continued disinflation in 2015 does not change our view on monetary policy," said Sonal Varma, chief India economist at Nomura.  Read MoreIndia waits for Modi to dig economy out of investment hole  "In our view, the RBI is focused on ensuring that inflation remains low even as the growth cycle starts to pick up in 2015-16. This requires continued vigilance from the RBI given elevated inflation expectations in India," she said. "It also requires not overreacting to any short-term undershooting on inflation for cyclical reasons."  Tushar Poddar, managing director, Global Macro Research at Goldman Sachs, has a similar stance, noting that while easing inflation increases the probability that the "RBI may start giving a larger weight to growth concerns rather than a single-minded focus on inflation", December is too soon for a rate cut.  "Given the helpful base effects in the October and November readings, still elevated inflation expectations, as well as uncertainty regarding the sustainability of weak commodity prices, we expect the RBI to remain on hold in the December meeting," he said.
Rapidly cooling inflation is building the case for the Reserve Bank of India  cut interest rates as soon as its next meeting on December 2.