India's Inflation Landscape: Navigating CPI and WPI Trends for 2026

India is refining its Consumer Price Index (CPI) methodology and adjusting monetary policy mandates to target retail inflation in 2026, following a stable price phase due to low food costs and GST cuts. With a new CPI series in 2024, inflation management strategy is being revamped for accurate economic representation.

India is gearing up to refine its methodology for calculating the Consumer Price Index (CPI) and revamp its monetary policy approach to target retail inflation more effectively in 2026. This update comes after a year defined by stable prices, driven by subdued food costs and strategic reductions in GST rates.

Throughout the year, CPI-based retail inflation remained within the Reserve Bank of India's comfortable range of 2-6%, suggesting a possible rate cut by the bank in coming months. Government measures like September's GST rate cuts on 400 items further alleviated inflationary pressures, signalling economic stability.

The WPI also reflected this trend, moving into deflation by mid-year, bolstered by low inflation in food and fuel. The upcoming CPI series will offer a comprehensive revision of data collection methodologies, promising a more accurate representation of the inflation landscape once released in February 2024.