Retail inflation rises to 2.75% in January under new 2024 CPI base.
CPI basket expands to 358 items, adding rural house rent.
Food inflation hits 2.1%, tomato prices surge 64.8%.
Economists see February inflation near 3.2%, within MPC tolerance band.
India’s Retail Inflation Rises to 2.75% in January as New CPI Base Year Kicks In
The pick up in inflation in January 2026 was on account of the food process, which turned to an inflationary trajectory
India's CPI inflation
Summary
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India's retail inflation spiked to 2.75% in January as the base is revised from 2012 to 2024 under the new consumer price index (CPI) methodology. It stood at 1.33% in December.
The data, released by the Ministry of Statistics and Programme Implementation today, reflects a major statistical overhaul aimed at making India’s inflation measure more representative of current consumption patterns.
The new series has increased coverage, with the number of weighted items increasing to 358 from 299 in the CPI 2012 series. The inclusion of rural house rent has been done for the first time. The rural house rent inflation stood at 3.2% in January 2026, which was more than the urban areas (1.9%).
"The top 5 items that registered the highest inflation are Silver Jewellery, Tomato, Coconut: copra, Gold/Diamond/Platinum Jewellery, and Coconut oil, with Silver Jewellery topping the list with an increment of about 160%,” said Rajeev Juneja, president of PHDCCI.
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Rural food inflation was 1.96%, compared with 2.44% in urban areas. Housing inflation for January stood at 2.05%. Rural housing inflation was higher at 2.39%, while urban housing inflation was recorded at 1.92%.
The pick up in inflation in January 2026 was on account of the food process, which turned to an inflationary trajectory. The food inflation stood at 2.1% in the last month, largely owing to a significant jump in tomato inflation at 64.8%. Prices of other key vegetables such as onion, potato, and garlic were in a deflation of 29.3%, 29.0% and 53.0%, respectively, during the period.
The difference in m-o-m CPI inflation between the 2024 and 2012 base year series from February 2025 to December 2025 ranges between negative 16bp to 34bp and it averaged 0.2bp in 11 months. This points towards a similar inflationary trajectory in the 2024 series with that of the 2012 series.
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"Inflation is expected to pick up in the coming quarters; however, it is expected to be within the tolerance band of the MPC. For February 2026, we expect the retail inflation to average 3.2% since the longer period data is not available at present, it is difficult to make any medium-to long-term prediction based on 13 months of data released at present," said Paras Jasrai, economist at India Ratings & Research.