India’s retail inflation for January 2026 rose to 2.75% year-on-year, according to the first reading from the updated Consumer Price Index (CPI) series with base year 2024. This marks the debut of a new methodology aimed at better reflecting modern household spending patterns. The previous CPI series, based on 2012 data, is now replaced to include more goods and services and updated weights for different items.
The new CPI also reduces the weight of food and beverages, which historically caused high volatility in overall inflation. Experts say this makes the new series a more accurate measure of current consumer price trends, helping policymakers and analysts better track inflation dynamics.
Food prices, which had seen declines for the past seven months, returned to positive territory in January, rising 2.13%. While food inflation has moderated, prices of housing and services saw slight increases, contributing to the overall CPI. Despite these shifts, the 2.75% figure remains comfortably within the Reserve Bank of India’s 2–6% target range, signalling that price pressures are moderate and unlikely to spur immediate policy changes.
Economists note that comparisons with historical CPI figures should be made cautiously due to the base-year revision. However, the updated methodology is expected to provide a realistic picture of how households spend today, capturing a broader range of goods, services, and lifestyle-related expenses.
The government’s move to revise the CPI reflects an effort to modernize statistical reporting and improve the reliability of economic indicators. This change will help in more informed decision-making for monetary policy, wage adjustments, and planning of social welfare programs.
Also Read: Citigroup CEO Jane Fraser’s $42 mn pay sparks debate