Retail food inflation in India remained in the negative zone (deflation) for the seventh consecutive month in December at – 2.71% year-on-year, largely due to the base effect and fall in prices of vegetables and pulses.
However, it inched up sequentially from – 3.91% in November, as prices of many food items firmed up
The consumer food price index (CFPI) declined by 0.24% sequentially in December compared to November, 2025. In December, 2024, the food inflation rate was at 8.39%. Food inflation was in the negative zone since June, 2025.
Analysts expect the food and beverage segment to revert to inflation in January 2026 after printing in the deflationary territory in six of the last seven months.
The inflation in the vegetable category was (-) 18.47% last month compared to (-) 22.2% in November.
However, edible oil and fruit inflation remained on the higher side at 6.75% and 6.66 % respectively last month.
What did chief economist, Bank of Baroda say?
Madan Sabnavis, chief economist, Bank of Baroda of Baroda said “food inflation continued to be negative at -2.7% driven mainly by vegetables and pulses,”. However, Sabnavis stated that inflation was high at over 5% for meat products, oils and fruits and will continue to exert upward pressure in the coming months.
“The increase in food inflation during the month of December, 2025 is mainly attributed to increase in inflation vegetables, meat and fish, egg, spices and pulses,” according to an official statement on Monday.
Inflation in mustard oil and refined oil were 8.23% and 3.92% respectively last month on year because of the rise in global prices. India imports about 58% of its edible oil consumption.
Overall cereal inflation in November eased further to 0.35% and had been in single digits for the past several months because of softening price rise in rice. Rice inflation last month declined by 1.26% on year.
Inflation in wheat last month eased further to 0.66% against a decline of 0.33% in November.
Pulses and Arhar Price Movements
Inflation in pulses declined by 15.09% last month for 11th successive months on the prospects of robust kharif harvest as well as encouraging rabi sowing and adequate carry forward stock held with the government, trade and other private entities.
The price rise in arhar continues to be in the negative zone since January, 2025 at – 28.48% last month because of a high base effect as fall in prices due to a record harvest as well as imports.
Inflation in pulses was as high as 113% in August 2024.
Rating agency ICRA expects the fruits and beverage segment to revert to an inflation in January 2026 after printing in the deflationary territory in six of the last seven months.
Inflation in the meat and fish category came in at 5.12% last month. Chicken inflation rose to 6.22% last month from only 0.36% in November.
Egg prices rose by a modest 4.76% in December, 2025. Inflation in spices continues to decline since September last year and stood at (-) 2.15% in December of last year.
Jeera prices declined by 13.37% last month.