India’s retail inflation rose to 2.75% in January, the first reading under a revised data series announced by officials on Thursday, signalling moderate price pressures as the economy adjusts to updated measurement standards.

The print was slightly above recent trends but still within a range viewed as manageable by policymakers, offering some reassurance to markets balancing growth and inflation expectations.

Analysts said the new data series could provide a clearer picture of consumption patterns and cost trends in the world’s fifth-largest economy.

Indian equities responded with modest gains after the announcement, while bond markets showed limited movement.

Economists noted that the inflation print reflects a combination of food price volatility and underlying demand conditions, with core inflation remaining moderate.

Central bank watchers said that the Reserve Bank of India is likely to consider the new series in future policy deliberations, though no immediate changes are expected.

Consumer goods and services cost trends will be closely monitored in coming months, as inflation dynamics influence household spending and corporate pricing strategies.

Some sectors may adjust prices gradually in response to evolving cost signals.

Broader economic indicators, including industrial output and retail sales, will provide further context for assessing inflation momentum and growth prospects in the Indian market.

Investors said that external demand and supply conditions could also shape price behaviour.

Looking ahead, inflation data under the revised system will be a focal point for policymakers and markets alike as they align on growth and price stability objectives for 2026.

Source: Reuters