India May Source Price Data from Amazon, Flipkart for Inflation Index: What it Means for Consumers

The Centre has decided to start collecting price data directly from e-commerce companies like Flipkart and Amazon to revise the benchmark inflation index.

According to a report, citing the Ministry of Statistics and Program Implementation (MoSPI), this move is aimed at capturing changing consumption and making the retail inflation data more accurate and robust. By taking in account the online prices, the government will account for the rising share of e-commerce in household spending.

This move aligns with a global trend, as countries like the US and South Korea have also begun to incorporate online and scanner data into their inflation measures. Reuters, in one of its reports cited a private study claiming that India had around 270 million online shoppers in 2024 and that this number is expected to rise by 22% each year.

Govt on using Amazon, Flipkart Data for Inflation Index

Speaking to Reuters, Saurabh Garg, secretary of MoSPI said, “The statistics ministry has begun scraping prices from e-commerce websites in 12 cities with populations above 2.5 million and is in talks with platforms to access data directly. ”The e-commerce companies have also been asked to provide weekly average prices of goods, which will be verified against a wider dataset to prevent distortions, the report mentioned.

How Will this Impact User

For Indian households, e-commerce makes up a significant part of its spending. The Household Consumption Expenditure Survey (HCES) noted that this spending is big enough to be included in the Consumer Price Index (CPI) basket, MoSPI Secretary said.

He also said that the goal is to make the index more representative and up-to-date. When the new CPI series launches early next year, it will use extra data sources and adjust weightages. This is because a recent survey showed that Indians now spend a smaller share of their budget on food. The update will also add online data for things like airfares and streaming services, as these have become major spending areas, Times of India reported.

Besides these changes in sources and items in the new CPI, multiple other major statistical upgrades are planned in the next two years, including a new GDP series with an updated base year of 2022-23, Garg stated. Earlier this year, the government expanded its monthly employment survey sample to improve accuracy and credibility, aligning it with global standards. It is also developing a new quarterly Index of Services Production (ISP) that will enhance the government's capability to track the services sector better. This sector makes up over half of India’s GDP, and the rollout of the new index is planned for mid-next year.