India CPI Inflation Eases To 1.33% In December on Food Price Relief

India’s consumer price inflation (CPI) moderated to 1.33% in December, reflecting continued relief from food prices. Despite the lower annual print, inflation rose on a month‑on‑month basis to 0.71%, indicating underlying sequential pressure.

The data points to a divergence between headline inflation and emerging momentum within key price components. Food prices remained the dominant factor influencing overall inflation dynamics.

Headline CPI And Sequential Inflation Trends

The CPI reading of 1.33% marked a subdued inflation outcome for December. However, inflation rose sequentially to 0.71% compared with the previous month.

This increase suggests that while annual inflation remains low, price momentum has started building beneath the surface. The combination highlights contrasting signals between year‑on‑year moderation and month‑on‑month firming.

Food Inflation Continues to Anchor Prices

Food inflation remained the primary driver of the softer headline number. It stood at ‑2.71% in December, maintaining a contraction for another month.

However, the deflation narrowed from a sharper ‑3.91% on a month‑on‑month basis. This moderation suggests that the pace of decline in food prices has slowed.

Sharp Deflation in Vegetables and Pulses

Vegetables continued to see steep deflation at ‑18.47% during December. Pulses inflation also remained deeply negative at ‑15.09%.

Both categories showed a slight easing in deflation compared with the previous month. These components significantly contributed to keeping overall food inflation in negative territory.

Rural And Urban Inflation Movement

Rural inflation rose to 0.76% on a sequential basis from 0.10%. Urban inflation increased to 2.03% from 1.40%, reflecting firmer price pressures in cities.

The divergence between rural and urban inflation highlights uneven demand and cost dynamics across regions. Urban areas showed relatively stronger momentum in price increases.

Fuel, Housing, And Clothing Prices

Fuel and light inflation cooled marginally to 1.97% from 2.32% on a month‑on‑month basis. Housing inflation edged lower to 2.86%, indicating modest stability in housing costs.

Clothing and footwear inflation eased slightly to 1.44% from 1.49%. These components contributed to a balanced inflation outcome during the month.

Read More: India on Track for 6.9% GDP Growth in FY27 Amid Goldilocks Scenario.

Conclusion

India’s CPI inflation eased to 1.33% in December, driven largely by continued deflation in food prices. Vegetables and pulses remained key contributors to the softer inflation print.

At the same time, rising sequential inflation and firmer urban prices indicated emerging pressure beneath the headline. The data highlights ongoing food‑led relief alongside gradual firming in core inflation components.

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