Retail Inflation Hits 1.33% in December on Veggie Price Surge
Overview
India's retail inflation climbed to 1.33% in December 2025, a three-month high, primarily fueled by soaring prices of vegetables and protein-rich foods. Despite the uptick, overall food inflation remained in negative territory for the seventh straight month. The inflation rate stayed below the Reserve Bank of India's lower tolerance band for the fourth consecutive month, signaling continued price stability.
India's retail inflation accelerated to 1.33% in December 2025, marking a three-month high. This uptick is primarily attributed to rising costs of essential kitchen items, including vegetables and protein-rich foods. The latest figure represents a significant increase from November's 0.71% and approaches September's 1.44% peak.
Vegetable Prices Drive Headline Increase
The National Statistics Office (NSO) attributed the surge in headline inflation to higher price pressures in personal care items, vegetables, meat, fish, eggs, spices, and pulses. This broad-based rise in select food categories pushed the Consumer Price Index (CPI) higher.
Food Inflation Stays Negative
Despite the headline increase, overall food inflation, measured by the CPI, continued its downward trend, remaining negative for the seventh consecutive month. In December, food inflation stood at (-) 2.71%, an improvement from November's (-) 3.91%. This suggests that while some specific food items saw price hikes, general food prices remained a deflationary force.
Below RBI's Tolerance Band
The retail inflation rate has now stayed below the Reserve Bank of India's (RBI) lower tolerance limit for the fourth month in a row. The central bank is mandated to maintain inflation at 4%, with a permissible band of 2% on either side (i.e., between 2% and 6%). The current inflation level indicates a scenario of price stability, below the target threshold.
