India’s annual retail inflation rose to 1.33% in December 2025, marking a three-month high and up from 0.71% in November, according to official government data released on Monday. The increase was largely driven by a slowing decline in food prices and higher costs for key items, including personal care products, vegetables, meat and fish, eggs, spices, and pulses.
Despite the uptick, the inflation rate remained significantly below the Reserve Bank of India’s (RBI) medium-term target range of 2–6% for the fourth consecutive month, underscoring a broadly benign price environment. Food inflation continued to stay in negative territory, although the pace of decline moderated in December compared with previous months.
Economists noted that the moderation in food deflation and softer base effects contributed to the headline rise. The data also comes against a backdrop of accommodative monetary policy, with the RBI cutting the policy repo rate by 25 basis points late in 2025 as inflation remained well contained. Looking ahead, analysts expect inflation to gradually edge higher but stay within manageable levels through mid-2026, even as a new Consumer Price Index series based on an updated base year is introduced next month.
