India’s retail inflation, measured by the Consumer Price Index (CPI), rose to 1.33% year-on-year in December 2025, remaining below the Reserve Bank of India’s lower tolerance limit for the fourth consecutive month, according to data released by the Ministry of Statistics and Programme Implementation on January 12, 2026 .
Headline and food inflation trends
Headline inflation increased by 62 basis points compared with November 2025, reflecting firmer price pressures across select categories. However, food inflation remained in negative territory at -2.71% YoY, marking the seventh consecutive month of deflation, though it inched up 120 basis points from November levels .
Rural vs urban inflation
Inflation dynamics diverged across regions. Rural CPI inflation rose to 0.76% in December from 0.10% in November, while urban inflation climbed to 2.03% from 1.40% in the previous month. Food inflation stayed negative in both segments, at -3.08% in rural areas and -2.09% in urban centres .
What drove prices higher
The rise in headline inflation during December was largely attributed to higher prices in personal care and effects, vegetables, meat and fish, eggs, spices, and pulses. Within non-food items, health inflation stood at 3.43%, education at 3.32%, and housing inflation at 2.86%, while fuel and light inflation eased to 1.97% .
Outlook
Despite the monthly uptick, the continuation of low headline inflation and sustained food price deflation suggests overall price pressures remained contained at the end of 2025. The data also marks the final CPI release under the 2012 base, with a revised series (base 2024=100) scheduled for release in February 2026 .