Retail inflation in January 2026 rose to 2.75% compared to the previous month. It was at 1.33% in December, the highest in eight months. Inflation had reached 2.82% in May 2025. The government released inflation data on Thursday, February 12.
E-commerce and airfare included in the new metric
The government has changed the base year for measuring inflation from 2012 to 2024. This change has been made after more than a decade. In a Bloomberg survey, 32 economists had estimated that this would result in January’s inflation rate being around 2.77%.
Weightage of food items reduced
The weightage of food items, which was around 50% in the old index, has now been reduced to 36.8%. According to Saurabh Garg, Secretary of the Ministry of Statistics, as Indians’ incomes rise, they are now spending less on food and more on housing and other services.
What’s Removed: Outdated radios, VCRs, and horse-drawn carriage fares have been removed from the index.
What’s Added: Airfare, online subscriptions, e-commerce shopping, rural housing rents, and electricity prices have been included instead.
What is a Base Year?
A base year is the year whose prices are considered the base. That is, the average price of goods in that year is given a value of 100. Then, prices in other years are compared to this base year. This shows how much inflation has increased or decreased.
