India’s retail inflation based on the Consumer Price Index (CPI) increased to 3.21% in February 2026, marking the highest level recorded in the last ten months.
The inflation rate rose from 2.74% in January 2026 to 3.21% in February, mainly due to an increase in food prices and certain consumer goods.
Despite the increase, the inflation rate still remains below the Reserve Bank of India’s medium-term target of 4% and within its tolerance band of 2% to 6%.
Key Highlights of CPI Inflation Data (February 2026)
| Indicator | February 2026 | January 2026 |
|---|---|---|
| CPI Inflation (Combined) | 3.21% | 2.74% |
| Rural Inflation | 3.37% | 2.73% |
| Urban Inflation | 3.02% | 2.75% |
| Food Inflation | 3.47% | 2.13% |
The sharp rise in food inflation played a major role in pushing up the overall retail inflation.
Major Reasons Behind the Rise in Inflation
Several factors contributed to the increase in CPI inflation in February 2026.
Rise in Food Prices
Food inflation increased significantly to 3.47%, compared to 2.13% in January, becoming the largest contributor to overall inflation.
Increase in Precious Metal Prices
Higher prices of gold, silver, and jewellery items also contributed to the rise in inflation.
Higher Prices of Consumer Goods
Prices of personal care products, clothing, and certain household goods also increased during the month.
Items Showing Highest Price Increase
Some items recorded significant price increases in February 2026.
| Item | Inflation Rate |
|---|---|
| Silver Jewellery | 160%+ |
| Gold and Diamond Jewellery | Around 48% |
| Copra | Around 46% |
| Tomato | Around 45% |
| Cauliflower | Around 43% |
Items Showing Price Decline
At the same time, prices of some food items declined, helping to control inflation.
| Item | Inflation |
|---|---|
| Garlic | –31% |
| Onion | –28% |
| Potato | –18% |
| Arhar Dal | –16% |
| Litchi | –11% |
These price reductions helped limit the overall inflation increase.
What is CPI Inflation?
The Consumer Price Index (CPI) measures the average change in prices of goods and services that consumers purchase over time.
It is the most widely used indicator to measure retail inflation in India.
The CPI basket includes categories such as:
- Food and beverages
- Housing
- Clothing and footwear
- Fuel and light
- Health and education
- Transport and communication
CPI data in India is released every month by the Ministry of Statistics and Programme Implementation (MoSPI).
New CPI Series with 2024 as Base Year
India has introduced a revised CPI series with 2024 as the base year, replacing the earlier 2012 base year.
Key changes include:
- Expansion of items in the consumption basket
- Updated consumption patterns of households
- Improved representation of modern consumer spending
The updated CPI series now tracks 358 items compared to 299 items earlier.
Impact on India’s Economy
The CPI inflation data plays an important role in shaping monetary policy decisions by the Reserve Bank of India (RBI).
Key implications include:
- RBI may continue a balanced approach toward interest rates
- Rising food prices could affect household spending
- Global energy price fluctuations may influence future inflation trends
Economists will closely monitor inflation data in the coming months to assess the direction of price stability in the economy.
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