Whalesbook
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.