Retail headline inflation in India climbs up to 4.9% in November 2021

India’s headline consumer price index grew by 4.9% y/y, registering an acceleration of 0.1pp as compared to the previous month. Despite an increase in the inflation figure, it remains in the inflation target band of the Reserve Bank of India. Core inflation remained virtually unchanged since the previous month, at 6.1%. The rise in headline inflation was caused by an increase in food and beverage inflation, to 2.6% in November, from 1.8% in October. Under food and beverages, cereals and products prices accelerated by 1.5% y/y in November, from 0.4% y/y in October, while milk and milk product prices saw a rise by 3.4% y/y from 3.2% y/y over the same period. The decline in vegetable prices narrowed to 13.6% y/y, from 19.4% y/y. 

The consumer price index pertaining to housing, which forms the second largest component of the inflation basket, also rose by 3.7% y/y in November, as compared to 3.5% y/y in the previous month. Fuel and light inflation, which had increased in a sustained manner for four consecutive months between July and October, saw a moderation to 13.4% y/y in November, thanks to a reduction in excise duty on fuel prices by central and some state governments.  

In terms of rural and urban inflation, the latter underwent a second increase in a row, to 5.5% in November, from 5% in October. The increase in rural inflation was less pronounced, growing to 4.3% from 4.1% between the same period. Considering the state level inflation, Sikkim, Jammu and Jammu and Kashmir, and Delhi experienced the largest inflation at 7.7%, 7.1%, and 7%, respectively, while Jharkhand, Odisha, and Manipur remained at low inflation levels.   

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Further data and analysis on India’s economy are available on the CEIC India Economy in a Snapshot – Q3 2021 report.