Inflation climbs to 3.21 percent in February
Silver and gold push prices up; economists see March edging higher on fuel and war fears
By Samreen Wani
Last Updated: Mar 12, 2026, 17:17 IST2 min
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India’s retail inflation climbed to 3.21 percent in February 2026, up 47 basis points from 2.74 percent in January, according to government data released on Thursday. Economists note this uptick aligns with market expectations.
Rural inflation, at 3.37 percent, outpaced urban inflation of 3.02 percent.
The increase was fuelled by the personal care segment, including prices of gold and silver, which surged at 19.6 percent, maintaining a growth rate above 19 percent for the second consecutive month. Madan Sabnavis, chief economist at Bank of Baroda, says, “This factor will continue to exert pressure in March too, given global uncertainty.” He notes that rupee depreciation would compound the pressure further.
Food inflation also increased to 3.47 percent in February from 2.13 percent in January—a sharp jump of over 130 basis points in a single month. Sabnavis attributed the rise to fading base effects and higher vegetable prices—tomatoes remained elevated at 45.3 percent, though moderating from January’s 64.6 percent, while cauliflower inflation rose to 43.8 percent.
While rural food inflation came in at 3.46 percent, urban stood at 3.48 percent, reflecting broad-based pressure across geographies.
Among the biggest price contributors, silver jewellery saw inflation of 160.8 percent, while gold and diamond jewellery rose 48.2 percent.
On the other side, garlic, onion, and potato continued to deflate sharply, offering some cushion to the overall food basket.
Education inflation also ticked up to 3.3 percent nationally, and 3 percent in rural India, a segment Sabnavis warned could show continued increases in coming months.
Housing inflation was at 2.12 percent in February with rural housing inflation higher at 2.43 percent compared to urban housing at 2 percent.
While clothing and footwear saw an inflation print of 2.81 percent, health was at 1.9 percent, inflation in the recreation and sport segment was at 2.21 percent, and in restaurants and accommodation services at 2.73 percent.
At the state level, Telangana recorded the highest inflation among large states at 5.02 percent. Rajasthan and Kerala were at above 3.5 percent each. Andhra Pradesh and West Bengal also saw an inflation print above 3 percent.
“In most of these states, rural inflation tended to be higher reflecting higher prices of food in these regions,” Sabnavis added.
Delhi remained among the more subdued markets at 1.96 percent.
Since the February data does not capture the impact of the ongoing West Asia conflict, Sabnavis cautioned that March inflation would reflect initial effects through higher fuel prices, particularly LPG, and forecast the March reading in the 3.2–3.5 percent range.
First Published: Mar 12, 2026, 17:25
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