Tomato and gold prices push retail inflation to 2.75% under new CPI series

New Delhi: The central government on Thursday released the first inflation data under the new Consumer Price Index (CPI) series with base year 2024, replacing the 2012-based index.

Under the new series retail inflation in January stood at 2.75%. This is the highest level of retail inflation in eight months. Retail inflation stood at 1.33% in December 2025. In January 2025, it stood at 4.26%.

The headline retail inflation has risen above 2%, the Reserve Bank of India’s lower tolerance band, for the first time since August 2025.

Retail food inflation for January has worked out to be 2.13% with rural food inflation at 1.96% and urban food inflation at 2.44%, as per data released by the Ministry of Statistics & Programme Implementation.

Weight of volatile items such as food has been reduced in the new series. Under the old series food and beverages together accounted for 45.9% of the CPI basket. In the new series it has been reduced to 36.75%. Food prices (excluding beverages) carry a weight of 34.77% in the new CPI basket.

The CPI series base has been revised from 2012 to 2024 using Household Consumption Expenditure Survey 2023-24. “The exercise is being done for enhancing the coverage and representativeness of the inflation measure,” the Ministry of Statistics & Programme Implementation said in a statement.

The number of weighted items has increased to 358 in the new series from 299 in the old series. Goods items rose from 259 to 308, while services increased from 40 to 50.

Items that have been added in the new series include, rural housing, online media service provider/streaming services, value added dairy products, barley & its product, pen-drive & external hard disk, attendant, babysitter and exercise equipment.

Items that have been removed from the CPI series include VCR/VCD/DVD player and hiring charges, radio, tape recorder, clothing second-hand, CD/DVD audio/video cassettes and coir/rope.

The inclusion of rural house rent has been exclusively done for the first time. The rural house rent inflation stood at 3.2% in January 2026 which was more than the urban areas (1.9%), said Paras Jasrai, Associate Director, India Ratings and Research.

Tomatoes and gold were the key drivers of retail inflation in January. Price of tomatoes in January was 64.8% higher when compared with the same month last year. Prices of other key vegetables such as onion, potato, garlic were in a deflation of 29.3%, 29.0% and 53.0%, respectively in January.

The core CPI in the new series stood at 3.4%. Going by the old series core inflation in January comes out to be 4.15%, SBI Research said in a note.

“The decline in core is mainly due to the change in weightage in gold, which declined to 0.62% in 2024 series, compared to 1.08% in 2012 series,” SBI Research said.

Among the states, highest inflation was recorded in Telangana at 4.92%. It was followed by Kerala 3.67%, Tamil Nadu 3.36%, Rajasthan 3.17% and Karnataka 2.99%.

“With another CPI inflation print for February due to be released before the next MPC meeting, there may be some more clarity on interpreting the CPI data,” said Aditi Nayar, Chief Economist, ICRA.

Besides, the new GDP series is also set to be released at end-February 2026, which may lead to revisions in the size of the economy as well as the quarterly growth rates during 2024-2026. “These data points will be key to reassess India’s growth-inflation mix and the direction of monetary policy action,” Nayar said.