India’s annual inflation rate climbed to 2.75% in January 2026, above market expectations of 2.4%. This was the first reading to fall within the Reserve Bank of India’s 2%–4% tolerance band since August of the previous year.
The January figure was also the first based on India’s revised Consumer Price Index (CPI), which updates the weights of individual goods and services using data from the Household Consumption Expenditure Survey conducted two fiscal years earlier.
Under the new CPI, food now carries a significantly smaller weight in the consumer basket. Even so, food inflation swung sharply higher, rising to 2.13% from -2.71% in the previous month, when the old CPI aggregation was still in use.
Price pressures were notably stronger in several categories, including personal care and social protection (19.02%), health (2.19%), and clothing and footwear (2.98%). By contrast, inflation in transportation remained subdued at 0.09%.
On a monthly basis, the new CPI increased by 0.35%.
