Retail inflation eases to 2.75% in January under new base year 2024

India’s retail inflation eased to 2.75% in January 2026, according to provisional data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Thursday.

The inflation rate is based on the newly introduced Consumer Price Index (CPI) series with base year 2024.

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Rural inflation stood at 2.73%, while urban inflation was marginally higher at 2.77%, reflecting stable price trends across both sectors.

Food inflation, measured by the Consumer Food Price Index (CFPI), was recorded at 2.13% year-on-year in January. Rural food inflation was lower at 1.96%, compared to 2.44% in urban areas.

Housing inflation during the month stood at 2.05%, with rural housing inflation at 2.39% and urban at 1.92%.

Among individual items, garlic (-53.05%), onion (-29.27%), and potato (-28.98%) recorded the sharpest declines in inflation at the all-India level.

On the other hand, silver jewellery (159.67%) saw the steepest rise, followed by tomato (64.80%), coconut (copra) (47.18%), and gold/diamond/platinum jewellery (46.77%).

Among major states, Telangana recorded the highest combined inflation at 4.92%, followed by Kerala (3.67%), Tamil Nadu (3.36%), Rajasthan (3.17%), and Karnataka (2.99%).

In a significant methodological overhaul, MoSPI revised the CPI base year from 2012 to 2024, using data from the Household Consumption Expenditure Survey (HCES) 2023-24.

The revised CPI adopts the international COICOP 2018 framework, expanding classification from 6 groups to 12 divisions, 43 groups, and 358 items, enhancing granularity and global comparability.

The total number of weighted items has increased from 299 to 358, with goods rising to 308 and services to 50, reflecting the growing importance of the services sector in household consumption.

The updated index includes new items such as rural housing rent, online media streaming services, CNG/PNG fuels, barley products, value-added dairy products, and digital storage devices, while outdated items like VCRs and cassette players have been removed.

The CPI 2024 series also introduces Computer Assisted Personal Interviewing (CAPI) for price collection and incorporates e-commerce and administrative data sources to improve accuracy and timeliness.

Under the revised structure, the share of food and beverages in the CPI basket has declined. Using the new COICOP classification, food and beverages account for 36.75% of the CPI 2024 basket, reflecting evolving consumption patterns.