Headline Inflation Rises to 3.21% in February 2026 Driven by Food Prices and Precious Metals: SBI Research

Mumbai : India’s headline Consumer Price Index (CPI) inflation witnessed a slight increase to 3.21% in February 2026, up from 2.75% in January 2026. According to the latest SBI Research "Ecowrap" report, this rise is primarily attributed to a sharp jump in food inflation and persistent pressure from imported inflation.

Key Findings:

• Food Inflation Surge: Food inflation jumped by 129 basis points (bps) to reach 3.55% in February. In the rural segment, inflation was entirely driven by food prices, while urban areas showed a mixed trend.

• Core CPI and State Divergence: All-India core inflation saw a marginal increase of 5 bps to 3.40%. However, state-wise trends remain divergent; notably, Telangana's core CPI crossed the 6% mark in February.

• Imported Inflation Risks: Driven by exchange rate fluctuations (Rupee hovering between 91-93 per dollar) and supply chain disruptions, imported inflation stood at 5.7%—245 bps higher than the headline rate.

• Precious Metals Impact: Personal care inflation reached 19.64% in February, fueled by a 48.16% rise in gold inflation and a staggering 160.84% in silver inflation.

• Future Outlook: The report warns of potential inflationary risks in late 2026 due to the possible buildup of El Niño patterns, which could affect the Indian monsoon, alongside ongoing geopolitical volatilities affecting energy and fertilizer prices.