India's December Inflation Hits 3-Month High; CPI Formula Changes from January

• Retail inflation in India rose to 1.33% in December, up from 0.7% in November, marking a three-month high.
• Despite the increase, headline inflation remained below RBI's 2% lower tolerance limit for the fourth consecutive month.
• The average inflation for 2025 was 2.2%, the lowest in 12 years, indicating controlled price pressures.
• December's CPI data is the last under the 2012 base year; January's data will use the new 2024 base year.
• The new CPI framework includes an updated consumption basket with more items and increased weightage for non-food expenses, aiming for a more accurate economic reflection.

Why It Matters: India's inflation rose in December, but a new CPI formula from January aims for a more balanced economic picture.