NEW DELHI: India's retail inflation, measured by the Consumer Price Index (CPI) , increased to a three-month hight at 1.33% in December, revealed the recent data released by MoSPI on Monday. After touching a record low of 0.25%, it increased marginally to 0.71% in November, before crossing 1% by the end of the year.
The rise has been attributed to higher prices of vegetables, meat and fish, eggs, spices, pulses, and personal care items. “The increase in headline inflation and food inflation during the month of December, 2025 is mainly attributed to increase in inflation of personal care and effects, vegetables, meat and fish, egg, spices and pulses and products,” stated MoSPI.
Despite the marginal increase over the last two months, the headline inflation still managed to remain much below RBI’s tolerable band between 2-6%. “Looking ahead, ICRA expects the F&B segment to revert to an inflation in January 2026 after printing in the deflationary territory in six of the last seven months.
This will push the headline CPI inflation reading above the 2.0% mark after a gap of four months, coming back above the lower end of the MPC's medium term target range of 2-6%,” said Aditi Nayar, Chief Economist, ICRA Ltd. Food inflation, which accounts for nearly a 40% weight in the consumer price index (CPI), remained in deflation at -2.7% in December.
However, the pace of decline has come down from -3.9% in November. Core inflation (CPI excluding F&B, F&L, and petrol and diesel for vehicles) jumped to a 28-month high of 4.8% in December 2025 from 4.4% in November 2025. Due to the sustained economic growth and low inflation figure in the last couple of months, RBI cut interest rates by 25 basis points in December, with expectations of another cut building up.
The December 2025 reading is the last print as per the current series (base year: CY2012). The next print, which will be released on February 12, 2026, will be as per the new CPI series (base year: 2024), and economists believe that the change in base year would envisage a change in the weighing pattern and consumption basket as per the Household Consumption Expenditure Survey (HCES) results of 2023-24.