The Reserve Bank of India is likely to opt for a 35 basis points (bps) rate hike at its policy meeting in December, after three consecutive 50 bps increases, as inflation eased in October and is likely to dip further, analysts said.

The RBI has already raised rates by 190 bps since May, to 5.90%, as it battles to reign in inflation that has stayed above its 2%-6% tolerance band for ten straight months now. Its Monetary Policy Committee (MPC) will next meet on Dec. 7.

Still, inflation eased to a three-month low of 6.77% in October from a five-month high of 7.41% in September, helped by a slower rise in food prices and a higher base effect, which economists said would mean smaller rate hikes going forward.

"Our base case envisages a 35 bps hike in December and a final 25 bps hike in February for a terminal repo rate of 6.50%," said Nomura economists, Sonal Varma and Aurodeep Nandi.

Barclays expects inflation to ease further to 6.5% in November and also forecasts a 35 bps hike next month, before the RBI shifts to a neutral stance.

Meanwhile, India Ratings expects an even sharper pullback given that the central bank has a front-loaded monetary tightening policy.

"We expect a status quo or, at best, a 25 bps rate hike in December."

Kotak Mahindra Bank said while inflation remains elevated, it likely peaked in September and favourable base effects would guide the inflation trajectory to below 6% from March.

The private lender's economists also expect a 35 bps hike in December and expect the MPC members to evaluate the impact of "previous rate hikes, improving sowing patterns of wheat and seasonal fall in perishable food items, and spillovers from global slowdown on the domestic economy."

The spate of relatively large rate hikes has sparked concerns that the battle against inflation could risk curbing economic growth as well, a view that Nomura's Varma and Nandi say could force the central bank's hand to even pause hikes.

"Based on our view that growth signals will incrementally start worsening and given the current split within the MPC, there is a risk the RBI may deliver a final rate hike in December and then opt for a pause." (Reporting by Dharamraj Dhutia; Editing by Savio D'Souza)