Data shows that food inflation again remained negative in the seventh consecutive month at -2.71 per cent in December 2025
After inching up to 0.71 per cent in November 2025, India’s consumer price index (CPI)-based retail inflation has again rose to 1.33 per cent in December 2025, data released from Centre on Monday showed.
Food inflation again remained negative in the seventh consecutive month at -2.71 per cent in December 2025, as compared to -3.91 in November 2025. However, this is significantly lower than 5.22 per cent for the same month a year ago.
The Ministry of Statistics and Programme Implementation (MoSPI) stated the increase in headline inflation and food inflation during December 2025 is mainly attributed to increase in inflation of personal care and effects, vegetables, meat and fish, egg, spices and pulses and products.
An increase in headline and food inflation in rural sector observed in December 2025. Rural inflation stood at 0.76 per cent in December as compared to 0.10 per cent in November 2025. Food inflation in rural areas (CFPI based food inflation) was at 0.38 per cent in December as compared to -4.05 per cent in November 2025.
Centre noted that an increase from 1.40 per cent in November, 2025 to 2.03 per cent in December 2025 was observed in headline inflation of urban sector. An increase was also observed in food inflation from -3.60 per cent in November 2025 to -2.09 per cent in December 2025.
Segment-wise Inflation
Year-on-year housing inflation rate for December 2025 is 2.86 per cent. Corresponding inflation rate for the month of November 2025 was 2.95 per cent. The housing index is compiled for urban sector only. Year-on-year education inflation rate was 3.32 per cent for December 2025. Corresponding inflation rate for November 2025 was 3.38 per cent. It is combined education inflation for both rural and urban sector.
The Centre highlighted that YoY health inflation rate for December 2025 was 3.43 per cent. Corresponding inflation rate was 3.60 per cent for November. It is combined health inflation for both rural and urban sector, the statement added. YoY transport and communication inflation rate was 0.76 per cent for December 2025.
Year-on-year fuel and light inflation rate for December 2025 is 1.97 per cent. The same inflation rate for November 2025 was 2.32 per cent. It is combined inflation rate for both rural and urban sector. Kerala recorded the highest-level of inflation at 9.49 per cent, followed by Karnataka at 2.99 per cent and Andhra Pradesh at 2.71 per cent.
RBI Governor On Inflation
The Reserve Bank of India (RBI) Governor Sanjay Malhotra considered the benign inflation outlook, headline as well as core, to vote for a 25 basis point cut at the December Monetary Policy Committee (MPC) meeting, the minutes of MPC revealed.
“Demand pressures, as evident from low core inflation (excluding precious metals), are minimal and projected to remain low in the next three quarters. Considering the benign inflation outlook, headline as well as core, real interest rates need to be lower. Therefore, I vote for a 25-bps rate cut,” the Governor noted.
Malhotra also highlighted that he was in favour of retaining the neutral stance which gives the requisite flexibility to remain data-dependent and act according to the evolving macroeconomic conditions and outlook. Receding inflation pressures, although above targets in some advanced economies, open up the scope for more accommodative policies in the ensuing month, he added.
GDP Growth Forecasts
Amid rising US tariffs, India on Wednesday projected economic growth of 7.4 per cent in fiscal 2025–26, up from 6.5 per cent in the previous year, according to the first advance estimates of gross domestic product released by the National Statistics Office under the Ministry of Statistics and Programme Implementation.
The projection exceeds the Reserve Bank of India’s (RBI’s) estimate of 7.3 per cent and is higher than last year’s 6.5 per cent. Nominal GDP, which includes inflation, is expected to grow 8 per cent, compared with 9.7 per cent last year. These figures will serve as the base for the federal union budget to be presented on 1 February.
India’s retail inflation is likely to remain comfortable in the current financial year, though it may edge up slightly as the sharp base effect in food prices fades, rating agency Crisil. The agency expects headline Consumer Price Index (CPI) inflation to average 2.5 per cent in 2025-26.
Crisil said inflationary pressures will remain largely under control, helped by weak global crude oil prices that are keeping fuel costs in check. At the same time, recent GST rate cuts on mass consumption goods are expected to support lower core inflation.
