India inflation hits 11-month high: 3.21% in Feb 2026

CPI inflation quickens after late-2025 lows

India’s consumer price index (CPI) inflation rose to 3.21% year-on-year in February 2026, up from 2.74% in January. The reading was broadly in line with market expectations of 3.1%, and marked the fastest pace in 11 months. The February print also reflected a shift from the unusually low inflation levels seen late last year, when easing food prices pulled the headline number closer to record lows. On a month-on-month basis, retail prices inched up 0.11%.

Food inflation firms, lifting the headline number

The acceleration in CPI inflation was led by food. India’s food inflation gauge rose to 3.47% in February, compared with 2.13% in January. The data suggests that the earlier pullback in food prices is normalising, pushing the overall inflation rate higher. Food remains a key driver of headline CPI in India, and changes in food prices often shape the near-term inflation trend.

Where consumer prices rose in February

Beyond food, several consumer categories recorded firmer annual price increases in February. Prices rose for:

• Restaurants and accommodation: 2.73%
• Clothing and footwear: 2.81%
• Paan and tobacco: 3.49%

These readings indicate that price pressures were not limited to food alone, even though food inflation was a major contributor to the month’s acceleration.

Transport turns slightly negative amid wholesale fuel softness

A notable offset in the CPI basket was transportation, where prices fell 0.05% year-on-year. The decline was linked to a pullback in oil and gas costs in the wholesale market. However, the same dataset also pointed to a potential change in the next month, noting that oil and gas costs in the wholesale market are set to rise in March due to the war in the Persian Gulf.

Longer-run inflation context from MOSPI and Trading Economics

Official data compiled by the Ministry of Statistics and Programme Implementation (MOSPI) shows CPI inflation in India has averaged 5.63% from 2012 to 2026. The series recorded an all-time high of 12.17% in November 2013 and a record low of 0.25% in October 2025. Separately, Trading Economics’ models and analysts’ expectations cited in the provided text indicate CPI inflation is expected to be 3.40% by the end of this quarter, with longer-term projections around 4.00% in 2027 and 4.10% in 2028.

Wholesale inflation rises in lockstep with retail inflation

Wholesale inflation also moved higher. India’s Wholesale Price Index (WPI) inflation rose to 2.13% year-on-year in February 2026, up from 1.81% in January and 0.96% in December, marking the third straight monthly rise and the highest level in 11 months. Another data point in the provided text shows the headline WPI was 2.45% a year ago (February last year).

The rise in wholesale prices broadly mirrored the retail trend, with the provided text noting CPI inflation quickened to 3.2% in February from 2.7% in January, largely due to a low-base effect and rising food prices.

What drove WPI: manufacturing and primary articles

Manufactured products remained a key contributor to the WPI print. Manufactured products inflation rose to 2.92% in February from 2.86% in January, and this segment carries a 64.23% weight in the WPI basket. Within manufactured items, the provided text reports year-on-year increases in:

• Basic metals: 4.4%
• Textiles: 3.3%
• Food products: 1.1%
• Chemical products: 0.7%

Primary articles also showed stronger inflation, with the category rising to 3.27% in February, up from 2.21% in January. Separately, the non-food articles inflation rate climbed to 8.80% in February from 7.58% in January.

Fuel and power stays in deflation, but month-on-month prices rise

The WPI fuel and power category remained in deflation at -3.78% in February, compared with -4.01% in January. On a month-on-month basis, however, the same category saw a 1.17% rise, indicating a firmer near-term trend. The text also notes Brent crude oil trading above $104 per barrel, a level that can influence input costs across the supply chain.

Key CPI and WPI numbers at a glance

Outlook signals from economists and ratings agencies

Several forecasts in the provided text point to higher wholesale inflation in March. ICRA expects WPI inflation to rise to 3.2% in March 2026, which would be a 21-month high, driven by rising food and commodity prices. The ICRA note also highlights global commodity prices, including crude oil, natural gas and edible oils, and references pressure from currency moves alongside India’s import dependence.

Other expectations cited include India Ratings and Research, which expects WPI inflation to jump to 3.7% in March due to a rise in crude oil prices. CareEdge Ratings stated that elevated energy prices could push WPI higher as input costs rise, and added that tensions in the Gulf region pose upside risks. The provided text also notes that fuel items including crude oil, natural gas and crude derivatives have a 10.4% weight in the WPI basket, and that ICRA estimates every 10% increase in crude oil prices could lift WPI inflation by 80-100 basis points.

Why this matters for markets and policy

Both CPI and WPI inflation moving higher signals firming price pressures across the consumer and producer sides of the economy. The narrowing gap between wholesale and retail inflation, as noted in the provided text, can indicate that input cost pressures are being passed through.

Inflation remains below the Reserve Bank of India’s 4% target, within the tolerance band of +/- 2%. The provided text also states the RBI has reduced policy interest rates by 1.25 percentage points in the current fiscal year as inflation remained low. Future policy decisions will continue to weigh the inflation trajectory alongside growth and external risks, including energy and freight costs linked to geopolitical tensions.

Conclusion

India’s February 2026 inflation data showed a clear step-up in both retail and wholesale price pressures, led by higher food inflation and firmer manufacturing costs. With multiple agencies flagging further hardening in WPI inflation in March amid global commodity moves and West Asia-linked risks, upcoming prints will be closely tracked for confirmation of the trend.