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India has rolled out a brand-new retail inflation series, updating the base year to 2024 from 2012. Under the revised CPI, inflation for FY26 stands at 2.75%, compared to 1.33% in the previous month under the old series.
This is the first major CPI revamp in over a decade. And it changes more than just numbers.
Updating the base year simply means changing the reference year used to compare today’s prices, so inflation reflects how people spend money now instead of how they did years ago.
The shift: food no longer rules
For the first time, food’s weight in the CPI has dropped below 40%. Earlier, it was closer to 45%+ dominance in practical impact. Now, non-food items make up over 60% of the index.
That means inflation readings will be less vulnerable to sudden spikes in vegetables or cereals. Services, housing and discretionary spending will carry more weight.
The basket gets modern: the CPI basket now tracks 350+ items, up from 299 earlier.
New additions include wireless earphones, pet food, sanitisers, fitness bands and air purifiers. Basically, the index now reflects how India actually lives and spends in 2026.
The numbers: the new series shows prices rising for three straight months
November: 104.01
December: 104.10
January: 104.46
Food inflation came in at 2.13%, but its impact on headline inflation will now be softer due to lower weighting.
Why it matters: this revision could make inflation look more stable going forward.
Short-term food shocks may not swing the headline number as sharply as before. Instead, trends in services, housing and lifestyle spending will drive the narrative.
In simple terms: inflation is now being measured for today’s India, not 2012’s India.
