The country's retail inflation rate for January 2026 has been recorded at 2.75 percent, providing significant relief to the middle class. The Ministry of Statistics and Programme Implementation has released this data according to the new Consumer Price Index (CPI) series. Notably, this is the first time inflation is being measured using 2024 as the new base year instead of 2012.
The inflation rate in rural areasGarlicPrice was recorded at 2.73%, while in urban areas it was 2.77%. This indicates that the price pressure is slightly higher in cities. Food inflation at the national level remained at 2.13%, with rural areas at 1.96% and urban areas at 2.44%. In January, there was a significant drop in the prices of several important kitchen items. Prices of items like garlic, onions, potatoes, and pigeon peas fell by 15% to 53%. This decline has helped in controlling food inflation, providing some relief in household expenses.
The housing inflation rate was recorded at 2.05%. It was 2.39% in rural areas and 1.92% in urban areas. It has been clarified that there is currently no significant pressure on housing and food prices. In the new CPI series, changes have been made to the inflation basket based on the 2023-24 household consumption survey. The weight of food and beverages has been reduced to 36.8%, while the share of housing, services, transportation, and digital services has been increased. Rent in rural areas, online shopping, and changing consumption patterns have also been included. As a result, the inflation picture is being presented in a more realistic manner.
According to experts, the new CPI series is going to be important for financial markets. Since inflation will now be measured based on current usage patterns, it could impact interest rates, bond yields, and investment decisions. Although the inflation rate is below the Reserve Bank of India's 4% target, changes in core inflation could influence future monetary policies. Overall, as of January 2026 data, inflation appears to be under control. However, with relatively more pressure on prices in urban areas, the government and policymakers will need to closely monitor the situation in the coming times.