New Delhi [India], March 6 : The new Consumer Price Index (CPI) series with base year 2024 reflects significant structural changes in consumption patterns and inflation measurement, but is unlikely to materially alter the overall inflation outlook, according to a report by SBI Research.
The report notes that the new CPI framework incorporates updated consumption trends, urbanisation patterns and modern goods and services, while remaining largely aligned with the inflation readings of the previous series.
As a result, the transition to the new series is expected to provide more granular policy signals without causing major disruptions to debt markets or monetary policy interpretation.
It stated "CPI new series is a veritable storehouse for robust data-based policy signals.... CPI is not evenly distributed across 358 items. This is extremely useful for inflation nowcasting (focus on heavy weights), corporate pricing strategy (watch categories that "matter") and scenario analysis (e.g., rent shock + fuel shock + milk shock)"
According to SBI Research, the difference between inflation calculated using the old and new CPI series remains very small. The variation is within a tight range of about plus or minus 20-23 basis points, indicating that the change in base year does not significantly alter the inflation trajectory.
For example, inflation for January 2026 under the new CPI series was around 2.74 per cent compared with 2.59 per cent under the older series.
The report highlighted that India's headline CPI under the new framework stood at about 2.75 per cent, while core inflation was estimated at around 3.38 per cent.
Notably, the new series shows lower core CPI compared with the earlier series, suggesting that underlying inflation pressures appear more moderate under the revised structure.
A key structural shift in the new CPI series is the reduced weight of food in the inflation basket. Food and beverages now account for about 36.75 per cent of the CPI basket, significantly lower than the 45.86 per cent share in the 2012 series.
At the same time, categories such as housing, transport, health and communication have gained higher importance in the CPI basket.
The report also pointed out that the CPI basket now includes 358 weighted items compared with 299 earlier, capturing modern consumption habits such as online media services, value-added dairy products and digital storage devices. Meanwhile, outdated items like VCRs have been removed from the basket.
Despite the expansion in items, inflation dynamics remain concentrated in a limited number of products. Around 50 per cent of CPI weight is captured by just 26 items, while 90 per cent of the weight is accounted for by 148 items.
This concentration makes it easier for policymakers and analysts to track inflation trends and conduct nowcasting by focusing on high-weight categories.
Overall, SBI Research said the revised CPI series offers a more contemporary picture of India's consumption structure and inflation dynamics.
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