India’s Retail Inflation Climbs to 1.33% in December 2025
Why in the news
CPI inflation for December 2025 came in at 1.33%, the highest of the last three months, but still beneath the lower end of the RBI’s comfort band.
Key facts
- December 2025 reading: CPI inflation at 1.33%, the best level in three months for price growth.
- Position versus band: below the 2% lower tolerance level.
- RBI target: 4% with a ±2% tolerance band.
About retail inflation
It captures the pace at which household purchase prices climb, and India follows it using the Consumer Price Index (CPI).
| Point | Detail |
|---|---|
| Coverage | Food, clothing, housing, fuel and light, transport, education, healthcare and more |
| Published by | Ministry of Statistics and Programme Implementation, monthly |
| Why it matters | Shows cost of living and affects household budgets |
| Policy link | RBI uses CPI inflation to set monetary policy |
Exam angle
- Tolerance band: lower limit 2%, upper limit 6%, around a 4% target.
- CPI compiled by the statistics ministry, not the RBI.