Pets, parties and personal effects drive January inflation despite softer food prices

Items related to garden products and pets saw inflation of around 8.5 percent

• January headline inflation at 2.75%, food inflation at 2.13%
• Personal items, pets, services drove inflation; silver jewelry rose 160%
• 14 of 43 CPI categories had above-average inflation; price rises not widespread.

Did our AI summary help?

India’s headline inflation stood at 2.75 percent in January under the new consumer price index (CPI) series, with food inflation relatively subdued at 2.13 percent. On a sequential basis too, prices rose 0.3 percent month-on-month, slightly faster than the 0.1 percent increase recorded in the previous month, indicating some pickup in price pressures.

While the decline in food weight in the revised CPI basket has helped moderate overall inflation, several non-food segments — notably personal effects, pets and select services — emerged as key drivers of inflation during the month.

Among the fastest-rising categories, other personal effects recorded inflation of about 59 percent, far exceeding the national average. This includes items such as silver jewellery, which recorded a 160 percent jump in January and gold items, which saw prices rise nearly 50 percent from last year.

Items related to garden products and pets saw inflation of around 8.5 percent, while transport services for goods registered roughly 7.5 percent inflation. Education services, alcoholic beverages and clothing also recorded inflation above the headline average.

Despite these pockets of price pressure, the broader inflation picture remained contained. Only 14 of 43 major CPI categories recorded inflation above the national average, suggesting that price increases were concentrated in a limited set of sectors rather than being broad-based.

Some categories even saw price declines. Vehicle purchases, information-communication equipment and household tools recorded negative inflation, partly reflecting tax rationalisation measures such as the GST adjustments introduced earlier in September 2025.

Food inflation, though lower than historical norms, continued to show divergence between rural and urban areas, with urban food inflation somewhat higher. Meanwhile, services such as accommodation, outpatient care and transport exhibited moderate price increases, consistent with rising demand for discretionary consumption.

As non-food items gain higher weight in the CPI basket, inflation readings are increasingly influenced by services, discretionary spending and lifestyle consumption rather than food prices alone.