India’s retail inflation edged up to 2.75% in January 2026 under the newly revised Consumer Price Index (CPI) series with base year 2024. This marks the first inflation reading under the updated methodology introduced by the Ministry of Statistics and Programme Implementation, aimed at better reflecting present-day consumption trends.
On a year-on-year basis, inflation stood at 2.75% in January 2026 compared to January 2025 (provisional data). Rural inflation was recorded at 2.73%, while urban inflation came in slightly higher at 2.77%. Meanwhile, food inflation, measured by the Consumer Food Price Index (CFPI), remained relatively contained at 2.13% nationally — with rural food inflation at 1.96% and urban food inflation at 2.44%.
Housing inflation for January was reported at 2.05%, with rural housing inflation higher at 2.39% compared to 1.92% in urban areas. In index terms, the All India CPI (General) stood at 104.46, with rural at 104.59 and urban at 104.30. The All India CFPI index was recorded at 104.04.
The CPI base year has been revised from 2012 to 2024, incorporating updated weights and items derived from the Household Consumption Expenditure Survey 2023-24. This significant statistical overhaul aims to enhance coverage, representativeness, and accuracy in tracking price movements across India.
A key structural change is the expansion from 6 broad groups to 12 divisions, aligned with the COICOP 2018 framework (Classification of Individual Consumption According to Purpose). The revised series also introduces more granular All India and state-level indices for rural, urban, and combined sectors, improving transparency and analytical depth for policymakers, financial institutions, and businesses.
The updated basket reflects evolving spending habits over the past decade. New inclusions feature rural housing, online media and streaming services, value-added dairy products, barley and its products, pen drives, external hard disks, attendants and babysitters, and exercise equipment.
Meanwhile, outdated items such as VCRs, VCD and DVD players, radios, tape recorders, CD/DVD cassettes, second-hand clothing, and coir or rope have been removed. The changes signal a shift toward capturing digital adoption, urbanisation, and modern lifestyle spending patterns.
A base year revision is more than a technical recalibration. It reshapes category weights and can influence the inflation trajectory, especially when consumption patterns have shifted significantly since the previous base year of 2012.
With headline inflation at 2.75% and food inflation at 2.13%, price pressures remain moderate for now. However, future readings under the revised series will be closely monitored to gauge emerging trends and potential monetary policy implications.
The revamped CPI framework is expected to deliver more accurate, data-driven insights into inflation dynamics, providing a clearer signal for economic and policy decision-making in the months ahead.
