India’s Inflation Seen Rising to 2.4% in January as New CPI Series Debuts

India’s annual consumer inflation rate likely climbed for a third straight month to 2.4% in January, according to a poll of economists, driven by firmer food prices and a surge in gold and silver costs alongside fading base effects. The January reading will be the first under a new consumer price index (CPI) series based on 2024 prices and marks a return of inflation to the Reserve Bank of India’s 2%–6% target band for the first time since August. The estimate represents a sharp rise from December’s 1.33% print under the old series, though forecasts varied widely as analysts navigated methodological changes.

The updated CPI basket brings significant revisions, most notably a reduction in the weight of food — one of the most volatile components — to about 37% from roughly 46% in the 2012 series. Economists say this could moderate future swings in headline inflation. Anubhuti Sahay of Standard Chartered noted that both food and core inflation likely edged higher in January, as the impact of last year’s unusually low prices dropped out of the comparison. Precious metals also played a role, with gold rising as much as 13% and silver nearly 19% during the month, reflecting safe-haven demand.

Looking ahead, analysts expect inflation volatility to ease under the revised structure, which expands major spending categories from six to twelve and begins tracking items such as e-commerce services, telecom plans and airfares. Many economists argue the previous weighting system overstated food’s influence and no longer reflected evolving household consumption patterns. Meanwhile, wholesale price index (WPI)-based inflation, which has not been rebased, is projected to rise modestly to 1.25% year-on-year from 0.83% in December.

Pic Courtesy: google/ images are subject to copyright