India December 2025 Inflation Hits 1.33%, Food Prices Drive Surprise Drop
Overview
India's December 2025 consumer price inflation decelerated to 1.33%, falling short of market expectations. Soft food prices, particularly in vegetables and pulses, were the primary contributors to this unexpected moderation. However, underlying urban and core inflation trends show gradual firming, warranting monitoring.
India's Inflation Cools Sharply in December 2025
India's consumer price inflation moderated to 1.33% in December 2025, a figure that undershot the CNBC-TV18 poll estimate of 1.62%. Data released Monday confirmed the deceleration. Inflation, however, rose on a month-on-month basis from 0.71%, pointing to emerging sequential pressures beneath the headline print.
Food Prices Provide Relief
Food prices remained the key driver of the softer inflation outcome. Food inflation stood at -2.71% in November, compared with the CNBC-TV18 poll estimate of -1.3%. This deep deflation eased slightly from a sharper -3.91% contraction on a month-on-month basis. Vegetables continued to see steep deflation at -18.47%, while pulses inflation remained deeply negative at -15.09%. These steep price drops significantly offset emerging sequential pressures.
Urban and Core Inflation Show Firming
Rural inflation rose to 0.76% on a sequential basis, up from 0.10%. Urban inflation increased to 2.03% from 1.40%, indicating firmer price pressures in cities. Fuel and light inflation cooled marginally to 1.97% from 2.32% on a month-on-month basis, while housing inflation edged lower to 2.86%. Clothing and footwear inflation also eased slightly to 1.44% from 1.49%.
Overall, the December data highlights continued relief from food prices. However, urban and core inflation trends show signs of gradual firming, a point of concern for policymakers.
