New Delhi:India’s benchmark inflation rate remained at the bottom of the RBI’s target band of 4% plus or minus 2% in December 2025 for the fourth consecutive month. The 1.3% retail inflation value, as measured by the annual increase in the consumer price index (CPI), is mostly the result of declining but persistent food prices, which is more than offset by inflation from sources such as precious metals.
The latest inflation readings also mean that quarterly inflation in the period ending December 2025 stood at 0.76%, the lowest so far in the current series and the second consecutive quarter when it remained below the lower end of the RBI’s target band. To be sure, the December quarter inflation print is slightly higher than the 0.6% estimated by the RBI in its December Monetary Policy Committee (MPC) resolution. Headline inflation has remained below the RBI’s substantive target of 4% for four consecutive quarters.
According to data released on Monday by the National Statistical Office (NSO), CPI growth in December 2025 was 1.33%. That’s slightly lower than the 1.56% estimated by a Bloomberg survey of economists. December’s inflation print showed an increase in monthly inflation compared to 0.7% in the month of November and is in line with forecasts that expect inflation to rise going forward. RBI’s December MPC resolution expects quarterly inflation to be 2.9%, 3.9%, 3.9% and 4% for the periods ending March 2026, June 2026, September 2026 and December 2026, respectively.
This is the last release of CPI based on 2012. The NSO release said that the revised CPI series, taking 2024 as the base, will be released on February 12.
December’s low headline print is primarily a result of falling food prices. Food items, which constitute 39% of the current CPI basket, saw an annual price contraction of 2.7% in December, the seventh consecutive monthly contraction under this category. The main reason for the contraction in the food category was a sharp fall in vegetable and pulse prices, with the respective subcategories seeing a contraction of 18.5% and 15.1% in December. Certainly, the pace of contraction in food prices has been gradually slowing down over the past few months