Inflation seen staying subdued in 2026; new CPI series expected in February, report says
India’s inflation could remain contained through 2026 amid benign commodity trends and softer food prices, with a new Consumer Price Index series expected in February that may shape how forecasts and policy signals are read.
Outlook: inflation expected to stay around target
India’s inflation trajectory is expected to remain broadly comfortable through 2026, supported by a combination of favourable food-price dynamics and a relatively calm global commodity environment, according to a report citing commentary around the outlook. The headline inflation path is seen aligning close to the Reserve Bank of India’s 4% target over the coming quarters, while some measures excluding specific volatile components may run even lower.
A central development for economists and markets is the planned release of a new Consumer Price Index (CPI) series in February 2026. With a refreshed basket and composition, the new series could influence how inflation is measured and interpreted, affecting not only forecasts but also how households and businesses read changes in the cost of living.
Why the new CPI series matters
Inflation measurement is not just a statistical exercise: it can shape wage negotiations, contract indexation, bond-market expectations and policy communication. A revised CPI basket can change the weight of categories such as food, fuel, housing, healthcare and services. Even if day-to-day prices move similarly, the headline number can behave differently after a rebase.
Analysts also point out that food prices and agricultural output remain key swing factors in India. If farm output stays healthy and supply is stable, the food component can keep a lid on headline inflation. Conversely, weather shocks or sharp commodity moves can quickly change the narrative, making the composition of the new CPI series especially consequential.
Policy implications and what to watch
With inflation perceived as manageable, the debate shifts to how much room monetary policy has to prioritise growth support without reigniting price pressures. The most important watchpoints into February and March are: the final details of the new CPI series, early readings under the new basket, and how the RBI calibrates forward guidance if disinflation remains durable.