Retail food inflation in India came out of negative zone (deflation) after seven months in January, 2026 at 2.13% on year as tomato and coconut become costlier, as per the new series of data with base year of 2024.
Mixed Plate
Despite rise in food inflation, prices of garlic (-53%), onion (-29%), potato (-285), arhar dal (-24%) and peas (-15%) declined last month. These five commodities have a combined weightage of 2.48% in the consumer price index (CPI) basket. However the prices of tomato (64%) and copra (47%) reported high inflation, according to the ministry of statistics and programme implementation (MoSPI).
During June-December, 2025, the food inflation measured through the 2012 series was in the negative zone largely due to the base effect and fall in prices of vegetables and pulses. “With the base effect now getting diluted, there will be a tendency for this component to rise,” Madan Sabnavis, chief economist, Bank of Baroda, said.
Statistics ministry stated on Thursday that the base year for measuring CPI has been revised from 2012 to 2024 using household consumption expenditure survey 2023-24. The weightage of All India Consumer Food Price Index in CPI has declined to about 36.73% from 45.86% in the new series.
Structural Evolution
In the new series, the key change has been the creation of a separate category for ‘restaurants and accommodation’ services where items like eating out and catering services, which were earlier classified under food and beverages, have now been moved to this new category.
Due to improved socio-economic status, in the food and beverages specifically, the largest reduction in consumption is in cereals – rice and wheat, which is now nearly half of what it was earlier, a statistic ministry official said adding that households are now spending much more on fruits, fresh vegetables, milk products, fish, meat, etc. “This shift is visible across all areas (rural and urban) and reflects real changes in consumption patterns nationwide,” the official said. Therefore, there is no bias in the estimates,” the official said.
According to the MoSPI, if the old classification system were followed, the share of Food and Beverages would have declined from 45.86% to 40.10%. However, the share of food and beverages continues to remain the largest component in the CPI basket.
Aditi Nayar, chief economist, ICRA said that the new CPI series is not comparable to the old series owing to the change in composition, weights and calculation methodology. “Nevertheless, with a dip in the weight of the food and beverages segment, we had expected the headline print to be slightly higher than our estimate of 2.5% for January 2026 as per the old series, which has been the case,” Nayar said.
An official of the statistics ministry had stated that there have been actual shifts in household expenditure patterns, with increased spending on housing, services, and transport, as reflected in the latest Household Consumption Expenditure Survey. “Looking ahead, inflation is expected to edge higher gradually as base effects fade and food inflation picks up gradually,” Sujan Hajra, Chief Economist, Anand Rathi Group, said. Categories such as beverages and service for processing primary goods for food reported inflation of 1.56% and 3.42% respectively in January, 2026.