India’s retail inflation under the new series is expected to rise to 3.1% in February from 2.8% in January, driven by increases in prices of some food items from a year ago, according to a Mint poll of 18 economists.
India’s statistics ministry had released a ‘back series’ for the Consumer Price Index (CPI) using the new base year of 2024. Economists in the poll expect the second print of the CPI under the new rebased series to land in the range of 2.8-3.4%.
The official data is scheduled for release on 12 March.
“We expect a further climb in headline CPI inflation as the scale of disinflation in food (including vegetables, pulses, etc.) continues to ease, while precious metal price pressures remain firm,” said Radhika Rao, economist at DBS Bank.
Food and beverages continue to dominate the overall inflation basket, though their share has been reduced from 45.9% in the previous 2012 base year to 36.8% in the new 2024 base year series. This is the sharpest recalibration among all categories, which experts say now better reflects actual spending patterns.
If the poll’s median projections prove accurate, this will bring inflation closer to the Reserve Bank of India’s (RBI) medium-term target of 4%, marking the end of the ultra-low inflation seen last year under the old series.
However, experts say a more immediate concern for policymakers is the conflict in West Asia. The , through which about a fifth of global oil supply passes, has seen traffic come to a halt following the conflict, sending crude prices briefly past $100 per barrel this week. India, which imports over 80% of its fuel needs, with roughly a third coming via this route, now faces both a supply squeeze and rising crude costs.
Retail inflation is already expected to rise to 4.0-4.2% in the first half of 2026-27, according to projections made before the West Asia conflict. According to analysts at Nomura, every 10% rise in oil prices could add 50 basis points to retail inflation. History also shows that prolonged conflicts have an impact on India’s inflation trajectory, and if this one drags on, the pass-through to retail prices could be significant.
“The focus will be more on how quickly Middle East tensions could ease given the impact of the conflict on key commodity prices, including oil and gas. The impact of rising commodity prices on the headline CPI trajectory will be key to watch in the coming days,” said Saurav Anand, economist at Standard Chartered Bank.
, which excludes volatile items such as food and fuel, is expected to have held steady in February, suggesting underlying price pressures remain contained.
“We expect the monetary policy committee to remain on a prolonged pause given India’s growth-inflation dynamics, the uncertain global environment, and elevated geopolitical tensions,” added Standard Chartered Bank’s Anand.