The Ministry of Statistics and Programme Implementation (MoSPI) released Consumer Price Index (CPI) data with Base Year 2024. Retail inflation in January 2026 was 2.75%, the first inflation data under the revised methodology. This new series replaces the Consumer Price Index with a base year of 2012 and reflects structural changes in the Indian economy, such as urbanization, digitalization, and changing consumption trends.

Inflation Key Highlights
¨     Headline CPI inflation: 2.75%
¨     Rural inflation: 2.73%
¨     Urban inflation: 2.77%
¨     Food inflation: ~2.13%
¨     Housing inflation: ~2.05%
Inflation remained within the Reserve Bank of India's (RBI) target range of 2–6%. Tomato prices rose sharply, while onion, potato, and garlic prices declined significantly. Jewelry inflation remained elevated, especially for silver.
CPI and Why Base Year Revisions Are Made
¨     The Consumer Price Index (CPI) measures changes in the prices of goods and services consumed by households and serves as a key indicator of cost-of-living inflation.
¨     The CPI is the Reserve Bank of India's (RBI) primary inflation gauge and plays a central role in monetary policy and interest rate decisions.
¨     The base year is the reference point against which price changes are measured, and the index is set at 100.
¨     As household consumption trends evolve, the base year is periodically updated to ensure the index's representativeness.
¨     The previous CPI series (base 2012) became irrelevant due to major structural changes such as rising incomes, urbanization, digitization, expansion of services, and shifts in consumption trends.
¨     This revision is in line with the International Monetary Fund (IMF) recommendations to periodically update the CPI basket.
¨     The new series is based on the Household Consumption Expenditure Survey (HCES) 2023–24, which ensures alignment between consumption weights and current price structures.
¨     The Ministry of Statistics and Programme Implementation (MoSPI) has aligned the weighting reference period with the price reference period to minimize base-year bias.
Key Changes
¨     Updated Base Year: The base year has been revised from 2012 to 2024. The price reference period is January–December 2024, while the weights are taken from the Household Consumption Expenditure Survey (HCES) 2023-24.
¨     Expanded Consumption Basket: The total number of items has increased from 299 to 358, with goods increasing to 308 and services to 50. This reflects the increasing importance of services in household consumption. Newly added items include OTT subscriptions, digital storage devices, exercise equipment, babysitters, and rural housing rentals. Obsolete items, such as VCRs, cassette players, and other obsolete electronic devices, have been removed.
¨     Adoption of COICOP 2018: The new Consumer Price Index (CPI) adopts the United Nations (UN) COICOP 2018 classification framework. It replaces six broad groups with a detailed hierarchy of 12 divisions, 43 groups, 92 categories, and 162 sub-categories. This improves global comparability and enables more granular monitoring of inflation. Some minor improvements have also been made to reflect Indian consumption trends.
¨     Revised Weights: The weights have been updated using data from the Household Consumption Expenditure Survey (HCES) 2023–24. The weight of food items has decreased from approximately 45.9% to approximately 36.75%, reflecting rising incomes and diversification of consumption. The weight of housing has increased to approximately 17.67%, while the share of transport, health, and services has also increased. The reduction in the food weight is expected to reduce inflation volatility.
¨     Revision of Housing Index: The Housing Index now includes rent, maintenance, and utilities. Rural housing rents have been included for the first time, improving national representativeness.