India’s consumer price inflation (CPI) is expected to have risen to 1.50% in December 2025, marking a second consecutive month of increase, according to a recent Reuters poll. The uptick in inflation is attributed to a broad-based rise in food prices and the fading effects of previously low inflation rates. Economists suggest that the recent unusually low inflation readings in India—the world’s fastest-growing major economy—may not be sustained as price pressures re-emerge across key sectors.

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December CPI Likely Climbs Amid Rising Food Prices

The Reuters poll, conducted between January 5 and 8, 2026, surveyed 36 economists and forecasted that India’s annual consumer price inflation (measured by the Consumer Price Index, CPI) increased to 1.50% in December from 0.71% in November 2025. This increase continues a trend of 11 consecutive months of inflation below the Reserve Bank of India’s (RBI) medium-term target of 4%, highlighting a period of relatively low price pressures.

Food Inflation Drives the Uptick

A key factor behind December’s inflation surge is the broad-based increase in food prices, which historically have a strong influence on India’s CPI. Despite significant declines in vegetable prices earlier in the year, sequential data indicates that food inflation accelerated in December as prices across most categories gained momentum.

Kanika Pasricha, Chief Economic Adviser at Union Bank of India, noted:

“This is generally unusual for a winter month when food price levels normally recede.”

This trend suggests that while India benefited from strong harvests and lower food prices earlier in 2025, those effects are beginning to fade, resulting in higher overall consumer inflation.

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Upcoming Changes in CPI Measurement

India will release its December 2025 CPI data on January 12, 2026, which will be the final report under the 2012 base year series. Beginning next month, the RBI and government statistical agencies will adopt a 2024 base year for CPI calculation.

This update is expected to:

• Reduce the weight of food items in the CPI basket
• Increase the weight of non-food components

Currently, food constitutes nearly 50% of India’s CPI basket, which economists argue no longer accurately reflects modern consumption patterns. Sakshi Gupta, Principal Economist at HDFC Bank, highlighted that the revised weightings are likely to reduce volatility in CPI data, particularly fluctuations caused by seasonal vegetable price swings.

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Core Inflation and Wholesale Price Trends

Beyond headline inflation, core inflation—which excludes food and fuel components—is estimated to have risen to 4.53% in December 2025, up from 4.2–4.3% in November. This increase is partly attributed to a 7% rally in gold prices over the same period. India does not publish official core inflation data, but market and polling estimates suggest a gradual upward trend.

Meanwhile, wholesale price inflation (WPI) is projected to have increased slightly to 0.30% year-on-year in December, reversing the -0.32% contraction recorded in November 2025. This indicates that price pressures are beginning to move from wholesale markets to retail consumers.

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Forecasts for Fiscal Year 2025–26

Separate survey medians indicate that average inflation for the current fiscal year is expected to be around 2.1%, rising to 4.0% in the next fiscal year. Economists suggest that persistent food and commodity price pressures, along with potential monetary policy adjustments by the RBI, could influence the pace of inflation recovery in 2026.

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Key Takeaways

1. Headline CPI likely rose to 1.50% in December 2025, continuing a two-month upward trend.
2. Food inflation drove the increase, reflecting stronger prices across most categories despite previous declines.
3. India will transition to a 2024 CPI base year, reducing food weightings and increasing non-food components.
4. Core inflation rose slightly to 4.53%, influenced by gold price rallies.
5. Wholesale price inflation has also ticked up, signaling broader price pressures.
6. Fiscal year forecasts indicate inflation will gradually move closer to RBI targets, potentially reaching 4% in the next year.