India’s retail inflation rose to 2.75% in January 2026, according to the first official reading released today under a revised Consumer Price Index (CPI) series using 2024 as the new base year. This marks the inaugural inflation data under the updated framework designed to reflect modern consumption patterns.
Key Inflation Metrics (Jan 2026)
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Headline CPI Inflation: 2.75% (higher vs Dec 2025’s 1.33% under the old 2012 base).
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Rural: 2.73% | Urban: 2.77%—indicating broadly uniform price pressures across the country.
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Food & Beverages Inflation: ~2.13%—weight in CPI is now <40%, lowering headline volatility.
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Housing Inflation: ~2.05%—reflecting increased weight in the new CPI basket.
For comparison, December inflation under the old CPI base was just 1.33%, underscoring how rebasing affects reported trends.
What’s Changed With the New CPI Framework?
The Government’s Ministry of Statistics and Programme Implementation (MoSPI) overhauled the CPI by shifting the base year from 2012 to 2024, incorporating the latest Household Consumption Expenditure Survey (HCES) and modern spending habits.
Top Structural Revisions
✔ More Comprehensive Basket: Expanded to 358 items vs ~299 previously, including services like OTT, online media, rural housing rentals, value‑added dairy, and tech accessories.
✔ Food Weight Reduced: From ~45.9% to ~36.8%, cutting headline volatility linked to volatile food prices.
✔ Greater Services & Core Weight: Services, transport, communication, and household goods now carry higher influence, with the core inflation share up.
✔ Detailed Classification: Adopts the COICOP 2018 structure with 12 divisions, boosting analytical depth.
👉 This overhaul aims to give policymakers, traders, and markets a more accurate, timely, and globally aligned gauge of inflation crucial for RBI rate strategy.
Market & Policy Implications
RBI’s Inflation Stance
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The February CPI print at 2.75% remains well within the RBI’s 2–6% tolerance band and below the 4% medium‑term target.
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With headline inflation still benign even under revised weights, the RBI’s room to keep rates unchanged increases. Recent RBI decisions show the status quo on repo at 5.25% earlier this month against similar inflation stability.
Impact on Markets & Economy
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Lower food weight and expanded services measurement can smooth headline CPI volatility, reducing knee-jerk market reactions to food price swings.
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A broader basket helps traders and policymakers better track structural price shifts, especially as India’s consumption mix evolves toward services and durable goods.
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Future CPI prints under this series will be closely watched by markets, bond yields, and currency traders for inflation trend confirmation.
What Traders Should Watch Next
Feb–Mar CPI prints: To confirm sustainability of inflation trend under the new base.
Core inflation behavior: With services and housing now weighted higher, core CPI movements will be crucial for RBI guidance.
RBI Policy Cues: Markets will track any shift in RBI commentary in upcoming policy meeting minutes or Governor speeches.
