India's Retail Inflation Holds Steady at 2.75% in January 2026 Under New CPI Framework
The Ministry of Statistics and Programme Implementation (MoSPI) has announced that retail inflation for January 2026, measured under the newly launched Consumer Price Index (CPI) series with base year 2024=100, stood at 2.75 per cent on a provisional basis. This figure represents a year-on-year comparison with January 2025, indicating stable price pressures in the economy.
Regional and Sectoral Inflation Breakdown
Delving into the details, the inflation rates varied slightly across regions. Rural areas recorded an inflation rate of 2.73 per cent, while urban areas saw a marginally higher rate of 2.77 per cent. This marks the inaugural release of retail inflation data under the revamped CPI series, which aims to provide a more accurate reflection of contemporary consumption patterns.
In terms of specific sectors, food inflation based on the Consumer Food Price Index (CFPI) was reported at 2.13 per cent. The breakdown shows rural food inflation at 1.96 per cent and urban food inflation at 2.44 per cent. Meanwhile, housing inflation for January 2026 stood at 2.05 per cent, with rural housing inflation at 2.39 per cent and urban housing inflation at 1.92 per cent.
Key Features of the New CPI Series
The new CPI series replaces the earlier base year of 2012 and is grounded in the Household Consumption Expenditure Survey 2023-24. This update is designed to better capture current consumption behaviors and enhance the coverage and representativeness of inflation measurement. The revised framework adopts 12 consumption divisions, up from six earlier groups, aligning with the Classification of Individual Consumption According to Purpose (COICOP) 2018 framework. This change enables more granular data, which is crucial for policymakers, businesses, and financial institutions.
Significant updates to the CPI basket include:
- Addition of new items such as rural housing, online media and streaming services, value-added dairy products, barley and related products, pen drives and external hard disks, attendant and babysitter services, and exercise equipment.
- Removal of outdated items like VCR/VCD/DVD players and hiring charges, radios, tape recorders, second-hand clothing, CD/DVD audio-video cassettes, and coir or rope.
The total number of weighted items has increased from 299 to 358, with goods items rising from 259 to 308 and services items increasing from 40 to 50. This expansion reflects the growing share of services in household consumption. Notably, the series introduces rural house rent for the first time and strengthens coverage of modern consumption patterns, including online services and cleaner fuels such as CNG and PNG.
This comprehensive overhaul of the CPI series is expected to provide a more nuanced and relevant measure of inflation, supporting informed decision-making across various sectors of the economy.
