India’s inflation rate, measured by the Consumer Price Index (CPI), stood at 1.33 per cent in December 2025, marginally higher than the 0.71 per cent recorded in November, according to the data MoSPI released on 12 January.
Food inflation continued to remain in the negative zone at (-) 2.71 per cent in December, reflecting lower food prices compared to the same month last year. This marked the seventh consecutive month of negative food inflation, providing sustained relief to household budgets.
The December reading was higher than the (-) 3.91 per cent seen in November.
Higher inflation in personal care and effects, vegetables, meat and fish, egg, spices and pulses drove the uptick in headline and food inflation in December 2025.
Despite this increase, the broader inflation outlook remains benign, supported by easing food prices and policy measures.
The Reserve Bank of India’s monetary policy committee (MPC) last month reduced its inflation forecast for the 2025-26 financial year to 2 per cent, down from 2.6 per cent projected in October. The bank attributed the revision to a sharp decline in food prices and the impact of GST rate cuts.
RBI Governor Sanjay Malhotra announced a 25 basis point cut in the repo rate to 5.25 per cent from 5.5 per cent earlier, citing the moderation in inflation and the need for monetary policy to support growth.
Malhotra said the acceleration in economic growth to 8.2 per cent in the second quarter of the current financial year, alongside a sharp fall in inflation to 1.7 per cent, had created a rare ‘Goldilocks period’ for the Indian economy.
The Governor further observed that food supply prospects have improved due to higher kharif output, healthy rabi sowing, adequate reservoir levels and favourable soil moisture conditions. He added that, barring some metals, international commodity prices are expected to moderate going forward.
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