What’s Driving the Surge in India’s Retail Inflation This December?

Retail Inflation Hits Three-Month Peak

New Delhi: In December 2025, retail inflation surged to 1.33 percent, marking its highest level in three months, primarily driven by rising costs of essential kitchen items such as vegetables and protein sources.

This increase follows a lower inflation rate of 0.71 percent recorded in November, with the previous peak being 1.44 percent in September.

Food inflation, as measured by the Consumer Price Index (CPI), continued its negative trend for the seventh month, standing at (-) 2.71 percent, although this is an improvement from the (-) 3.91 percent seen in November.

According to the National Statistics Office (NSO), the uptick in both overall and food inflation in December is largely due to rising prices in personal care products, vegetables, meat, fish, eggs, spices, and pulses.

Retail inflation has remained below the Reserve Bank of India's lower tolerance threshold for four consecutive months as of December.

The government has tasked the central bank with maintaining inflation around 4 percent, allowing for a margin of 2 percent on either side.