India Inflation Rises to 11-Month High

The consumer price index in India rose 3.21% annually in February of 2026, picking up from the 2.74% in the previous month and loosely in line with market expectations of 3.1% to mark the fastest pace of inflation in 11 months. The increase reflected the normalization of Indian inflation after a pullback in food prices drove the headline rate to continuously test record lows late last year. The food inflation gague rose to 3.47% from 2.13% last month. Prices also rose firmly for restaurants and accommodation (2.73%), clothing and footwear (2.81%), and paan and tobacco (3.49%). In turn, prices fell for transportation (-0.05%) amid the pullback in oil and gas costs in the wholesale market, which are set to rise in March due to the war in the Persian Gulf. From the previous month, prices inched higher by 0.11%.

The inflation rate in India rose to 2.75% in January of 2026, firmly above market expectations of 2.4%. The result marked the first inflation rate within the RBI's tolerance band of 2%-4% since August of the previous year. The rate was the first measurement in India's new CPI, which updated the weights of different goods within the index according to the Household Consumption Expenditure Survey from two fiscal years ago. Food inflation, which now accounts for a much smaller portion of the Indian consumer basket, surged to 2.13% from the -2.71% in the previous month, which used the old aggregators for the index. Meanwhile, inflation was elevated for personal care and social protection (19.02%), health (2.19%), and clothing and footwear (2.98%). In turn, transportations inflation was muted at 0.09%. From the previous month, the new consumer price index was at 0.35%.

The consumer price inflation rate in India rose to 1.33% in December of 2025 from 0.71% in the earlier month, extending the normalization from the record low of 0.25% in October but below the market consensus of 1.5%. Despite the second consecutive increase, the inflation rate remained sharply below the Reserve Bank of India's tolerance limit of 2%-6%. Prices fell less for food (-2.71% vs -3.91% in November), which represent nearly half of the Indian consumer basket. In turn, inflation eased for housing (2.86% vs 2.95%) and fuel and light (1.97% vs 2.32%). From the previous month, the Indian CPI was 0.05% higher to end the year.