India's inflation cools to 2.75% under new CPI base
What's the story
India's retail inflation for January 2026 has been pegged at a provisional rate of 2.75%, according to the new Consumer Price Index (CPI) series with a base year of 2024. The figure is slightly different from the current rates of 2.73% for rural areas and 2.77% for urban regions. This is the first time that the government has released retail inflation data under this new CPI series, which was introduced by the Ministry of Statistics and Programme Implementation (MoSPI).
Sectoral inflation
Food inflation at 2.13%, housing costs rising
The food inflation rate, as per the Consumer Food Price Index (CFPI), is at 2.13%. It is lower in rural areas at 1.96% but higher in urban regions at 2.44%. Meanwhile, housing inflation for January 2026 stands at a modest 2.05%, with rural housing costs rising more than urban ones at 2.39% and 1.92%, respectively.
CPI evolution
What is the new CPI series?
The new CPI series, which replaces the earlier 2012 base, is based on the Household Consumption Expenditure Survey 2023-24. It aims to better reflect current consumption patterns and improve the coverage and representativeness of inflation measures. The revised framework has replaced six earlier groups with 12 consumption divisions, in line with COICOP 2018 framework for more granular data for policymakers, businesses, and financial institutions.
CPI changes
New items added to CPI basket
The revised CPI basket now includes new items such as rural housing, online media and streaming services, value-added dairy products, barley and related products. It also adds pen drives and external hard disks, attendant and babysitter services as well as exercise equipment. On the other hand, it has removed items like VCR/VCD/DVD players, radios, tape recorders, second-hand clothing, CD/DVD audio-video cassettes, and coir or rope.
CPI expansion
Modern consumption patterns now reflected
The new CPI series has increased the total number of weighted items to 358 from 299 earlier. This includes goods items rising to 308 from 259 and services items increasing to 50 from 40. The revised series also introduces rural house rent for the first time and strengthens coverage of modern consumption patterns such as OTT services and cleaner fuels like CNG and PNG.