India’s retail inflation, the rate at which consumer prices rise year-on-year — increased to 2.75 per cent in January 2026, according to the latest CPI (Consumer Price Index) data released by the Ministry of Statistics and Programme Implementation (MoSPI). This reading brings inflation back within the Reserve Bank of India’s (RBI) target band of 2 %–6 % for the first time since August 2025.
What’s New with the Inflation Measure
- The January figure comes from a revised CPI series that uses 2024 as the base year and updates the consumption basket to reflect current spending patterns, including more services and digital goods.
- The updated CPI now covers more goods and services and adjusts the weight of food and housing categories, aiming to provide a more accurate picture of how prices affect Indian households.
- Because the index methodology changed, January’s inflation figure isn’t strictly comparable with old series data (which showed lower figures for December 2025 under the old base).
What’s Driving Prices
- Food inflation was measured at around 2.13 % in January, contributing to the overall rise.
- Both rural and urban inflation were close to the all-India average, showing fairly uniform price trends across regions.
- Broader categories such as housing and services also influence the headline rate under the new index.
What It Means
- The 2.75 % figure is comfortably within the RBI’s inflation tolerance band (2 %–6 %), suggesting that price pressures at the start of 2026 remain contained even as some components tick up.
- Because the CPI revision changes how inflation is tracked, analysts say the new series gives a more contemporary view of price movements and will be closely watched for future policy guidance.
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