Retail Inflation at 2.75% in January as India Introduces New CPI Base Year 2024

India’s retail inflation rate stood at 2.75 percent in January 2026, marking the first official release under the revised Consumer Price Index (CPI) series with a new base year of 2024. The updated data signals a significant overhaul in how inflation is measured, with the aim of aligning the index more closely with current consumption patterns and evolving household spending behaviour.

According to the latest figures, rural inflation was recorded at 2.73 percent, while urban inflation came slightly higher at 2.77 percent. Food inflation, measured through the Consumer Food Price Index (CFPI), remained relatively moderate at 2.13 percent nationwide. Rural food inflation was reported at 1.96 percent, compared to 2.44 percent in urban areas, reflecting varied price trends across regions.

Housing inflation during the same period stood at 2.05 percent overall. Rural housing prices rose at a faster pace of 2.39 percent, while urban housing inflation was recorded at 1.92 percent. In index terms, the All India CPI (General) reached 104.46, with rural areas at 104.59 and urban regions at 104.30. Meanwhile, the All India CFPI index stood at 104.04.

The shift from the earlier base year of 2012 to 2024 represents a major structural update. The revised index uses data from the Household Consumption Expenditure Survey 2023–24, allowing policymakers to capture changes in consumer habits driven by digitalisation, urbanisation and evolving lifestyles. The updated framework expands the classification structure from six broad groups to twelve divisions, following the COICOP 2018 methodology, which is widely used internationally for consumption analysis.

One of the most noticeable changes in the new CPI basket is the inclusion of modern spending categories. Digital services such as online media and streaming platforms, along with exercise equipment, rural housing and value-added dairy products, are now part of the index. On the other hand, outdated items like VCR and DVD players, cassette tapes, radios and certain traditional goods have been removed, reflecting the transition toward a more technology-driven economy.

The revised series also introduces more detailed state-level and sector-wise item indices for rural, urban and combined segments. This increased granularity is expected to improve transparency and provide deeper insights for economists, businesses and financial institutions tracking price trends.

Economists note that a change in the CPI base year is not merely technical. It can reshape inflation readings by adjusting category weights to match present-day consumption realities. With headline inflation currently below the central bank’s comfort threshold, price pressures appear contained for now. However, future readings under the new CPI structure will be closely monitored to assess the trajectory of inflation and its implications for monetary policy.

The updated methodology is expected to strengthen data-driven economic decision-making and offer a clearer picture of India’s inflation dynamics in a rapidly changing consumption landscape.