India’s Retail Inflation Rises to 2.75% in January Under New CPI Series
India’s retail inflation rose to 2.75% in January 2026, driven by higher food and precious metal prices. This is the first data release under the new Consumer Price Index (CPI) series.
The base year for CPI has been updated from 2012 to 2024. The consumption basket has also expanded from 299 to 358 items. This update aims to better reflect current household spending patterns. For the first time, rural house rent has also been included in the index.
Food Inflation at 2.13%; Rural and Urban Rates Nearly Equal
Data released by the Statistics Ministry on Thursday, February 12, showed that food inflation under the revised series rose to 2.13% year-on-year. However, its impact on overall headline inflation is expected to be lower than in the previous series due to reduced weighting.
Inflation in rural areas stood at 2.73%, while urban inflation was slightly higher at 2.77%. The government has not yet shared detailed comparable data for key components under the new CPI series.
RBI’s Inflation Target and Policy Outlook
The Reserve Bank of India (RBI) uses CPI data to decide monetary policy. It aims to keep retail inflation within a target range of 2% to 6%.
Although inflation increased in January 2026 compared to December 2025, it has returned to the RBI’s target band for the first time since August.
Deepti Srivastava, Deputy DG, MOSPI
- 40% increase in towns covered under the new CPI series
- 25% increase in services items
Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said inflation data came in line with expectations. She noted that core inflation appears lower than expected, though detailed numbers are still awaited.
She added that while the inflation trend remains stable, the RBI’s rate-cutting cycle may have ended. According to her, the central bank is likely to keep interest rates unchanged for an extended period through at least calendar year 2026.
CPI Revision to Reflect New Consumption Trends
Saurabh Garg, Secretary at the Ministry of Statistics and Programme Implementation (MoSPI), earlier told NDTV Profit that the CPI revision will better capture changing consumption patterns. He said it will also support government decision-making and serve as an important indicator for businesses.
Garg added that MoSPI plans to revise the GDP base year every five years. The next household consumption survey will be conducted after a three-year gap.
Methodology Upgrades and Digital Price Collection
The government is updating the CPI base year after more than a decade. As part of the methodology upgrade, the ministry has started collecting prices from e-commerce and digital platforms such as Amazon and Swiggy. This is being done across 12 cities with populations above 2.5 million.
Prices for airline tickets and OTT streaming services like Netflix are also being included in the new series.
Under the old CPI series with 2012 as the base year, retail inflation was 4.26% in January 2025 and 1.33% in December 2025.
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