India's retail inflation is likely to have experienced a notable increase in December 2025, climbing to 1.66% from 0.71% the previous month. This projection, made by the Union Bank of India, points to a broad-based strengthening of food prices across most segments of the food inflation basket.
In related news from the previous year, December 2024 saw India's retail inflation easing to a four-month low of 5.22% from 5.5% in November 2024. The National Statistics Office (NSO) attributed this moderation to a cooling of food inflation, which marginally decreased from 9.04% in November to 8.4% in December.
The Ministry of Statistics and Programme Implementation noted a significant decline in inflation for vegetables, pulses, sugar, and confectionary items during December 2024. While the overall trend indicated easing prices, some specific food items, such as edible oils and fats, saw accelerated price increases, reaching a 33-month high of 14.6% compared to 13.3% in November. Vegetable inflation also moderated slightly from 29.3% to 26.6%, although prices for items like peas and potatoes increased sharply.
The Consumer Price Index (CPI) data revealed that urban residents experienced a 4.6% increase in overall consumer prices in December 2024, down from 4.9% in November. Rural consumers faced a steeper price rise of 5.8%, only marginally lower than the 5.95% recorded in the previous month.
Examining specific categories, cereals inflation stood at 6.5% in December 2024, down from 6.9% in November. Pulses prices rose by 3.8%, marking the slowest inflation in over two years. However, protein sources like eggs (6.85%) and meat and fish (5.3%) reported higher inflation in December 2024, while milk price increases remained relatively stable at 2.8%. The top five items showing the highest year-on-year inflation at the All India level in December 2024 were peas (89.12%), potatoes (68.23%), garlic (58.17%), coconut oil (45.41%), and cauliflower (39.42%). Conversely, key items with the lowest year-on-year inflation included jeera (-34.69%), ginger (-22.93%), dry chilies (-10.32%), and LPG (-9.29%).
The Reserve Bank of India (RBI) is closely monitoring the inflation trends. The central bank is awaiting a durable reduction in retail inflation to 4% before considering interest rate cuts to stimulate economic growth.
