Retail Inflation at 2.75% in January; OTT and Online Shopping Added to New CPI Basket
India’s retail inflation stood at 2.75% in January 2026. The increase was mainly driven by higher food prices and a surge in precious metal prices such as gold and silver. From January 2026, inflation is being measured under the revised Consumer Price Index (CPI) 2024 series.
The base year has been updated from 2012 to 2024, and the index is now prepared using data from the Household Consumption Expenditure Survey 2023–24. Under the previous series, retail inflation in December 2025 was 1.33%. Despite the January rise, inflation has remained below the Reserve Bank of India’s 4% target for the past 12 months.
Reduced Weight of Food in CPI Basket
The weight of food items in the new CPI basket has been reduced to 36.75%, compared to around 46% earlier. Food inflation in January 2026 was approximately 2.13%. With lower weightage, fluctuations in food prices will have a smaller impact on overall inflation figures.
Changing Consumption Patterns Reflected
The updated CPI reflects shifts in household spending patterns over the past decade. Expenditure on cereals such as rice and wheat has declined, while spending on fruits, vegetables, milk, meat, and fish has increased across both rural and urban areas.
New Items Added, Obsolete Items Removed
Reflecting the growing role of technology in daily life, the new CPI basket includes OTT services, online prices, mobile plans, airfare, and e-commerce data. Additional items added include rural housing, value-added dairy products, barley products, pen drives, external hard disks, caregivers, babysitters, and fitness equipment.
Items removed from the basket include VCR/VCD/DVD players, radio sets, tape recorders, second-hand clothing, audio-video CDs/DVDs, and coir/rope products.
Expanded Data Coverage
The CPI now covers 1,465 rural markets, 1,395 urban markets across 434 cities, and online markets in 12 major cities. Prices from physical markets are collected monthly, while online prices are gathered weekly. Data collection is now tablet-based, enhancing accuracy and efficiency.
Structural Changes in CPI 2024
The total number of items in the CPI basket has increased from 299 to 358. Rural housing has been included with a weight of approximately 11.76%. Free government services are excluded, as CPI measures only goods and services for which households actually spend money.
The revised CPI aims to better capture real consumer spending patterns and provide policymakers with a more accurate picture of inflation trends in India.