India's 2026 Inflation Reset: CPI Hits 2.75% Amidst Landmark Series Overhaul

Market snapshot: On February 12, 2026, the Ministry of Statistics and Programme Implementation (MoSPI) unveiled India's much-anticipated revised Consumer Price Index (CPI) with the base year shifted to 2024. The headline retail inflation for January 2026 printed at 2.75% YoY, marking a technical rise from the previous record low of 1.33% in December 2025. This figure arrived marginally below the market consensus of 2.77%, validating the RBI’s recent shift toward a 'Neutral' stance as price dynamics stabilize under a more modernized consumption basket.

Summary: India's January 2026 CPI inflation stands at 2.75%, slightly under the 2.77% estimate. The print marks the debut of the new 2024 base series, which reduces food weightage and increases the focus on services and housing.

Key Takeaways

• The CPI base year overhaul from 2012 to 2024 better reflects current urban-rural spending patterns, with food weights dropping from ~46% to 36.75%.
• Core inflation remains the dominant anchor for the RBI, currently holding stable at 2.6% when excluding the 60-70 bps volatility contributed by precious metals.
• The 2.75% print is technically a 'normalization' from December's 1.33%, primarily driven by unfavorable base effects from early 2025.

SAHI Perspective

This is a structural pivot for Indian macroeconomics. By reducing the weight of volatile food and beverages, the MoSPI has effectively dampened 'noise' in headline readings. For traders, this implies that the Reserve Bank of India (RBI) will likely maintain its current repo rate of 5.25% for a prolonged period. The real interest rate remains high at ~250 bps, providing the RBI a massive cushion against any potential currency volatility, especially as the Rupee tests levels near ₹90/$. Expect bond yields to remain range-bound with a slight upward bias until the April policy review.

Closing Insight

The 2.75% print signifies that India has mastered its inflation beast for now, but the higher weightage given to Services in the new CPI means policy will now be more sensitive to domestic demand and wage growth than monsoon cycles.

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