India Retail Inflation Hit By Gold & Silver Rates Rally? CPI Jumps At Staggering 3.21%, Food Inflation 3.47%

India's year-on-year retail inflation rate based on the consumer price index (CPI) surged to 3.21% in February on account of rising food inflation, as data released by the Ministry of Statistics and Programme Implementation on Thursday, March 12. Subsequently, firm gold and silver prices contributed in keeping the core inflation higher. CPI Inflation, also known as retail inflation, remained at 2.74% in January 2026.

Surge in retail inflation was led by rise in prices of food and beverages, clothing and housing utility services. India's CPI inflation stood at 3.21% in February, against 2.74% recorded in January 2026. Meanwhile, the food price inflation surged to 3.47% in February against 2.13% recorded in January.

This is the second inflation rate release after the implementation of new CPI inflation series with base year as 2024 instead of 2012. The revamped CPI inflation formula will not just track food and fuel prices, but will also include modern-day expenses like online shopping, OTT subscriptions, and airfares. The changes could have wider implications for interest rates, EMIs and overall monetary policy.

Gold, Silver, Tomato, Among Top 5 Items With Highest Inflation In February 2026

Despite a modest increase in gold and silver prices in February, the precious metals continued to contribute in the overall inflation rate. As per the MOSPI data, released on Thursday, silver jewellery remained top on the list of items with high inflation at All India combined level in February, 2026. Inflation percentage of silver jewellery increased marginally to 160.84%, compared to 160.12% in January.

Inflation percentage of gold, diamond and platinum jewellery increased to 48.16% compared to 46.8% in January. Inflation in tomato prices declined declined to 45.29% in February, against 64.58% in January.

Top 5 Items With Lowest Inflation In February

Garlic, onion, potato, arhar, tur, and litchi, were among the top five items with lowest inflation in February as per MOSPI data. Garlic price inflation percentage increased from -53% to -31% in February, 2026.

Gold, Silver Contribute in Inflation; Tomato, Other Vegetable Prices Remain Elevated

Gold and silver contributed significantly in the overall inflation rate in February. Gold and silver prices saw a sharp surge in January. While there was a decent price correction in February, the precious metals rate remained elevated throughout the period.

"The Consumer Food Price Index rose 3.47% year-on-year, with vegetables such as tomatoes and cauliflowers still elevated despite sequential declines. Jewellery prices, particularly gold and silver, also contributed significantly, with gold-related inflation at 48.16% and silver jewellery at over 160%, underscoring the impact of the global bullion rally on domestic inflation," explained Vikrant Chaturvedi, Associate Director - Research, Brickwork Ratings.

Core Inflation At 3.4%

Core inflation in February remained at 3.4% which signalled contained demand-side pressures in other sectors. "Core inflation, excluding food and energy, is estimated near 3.4%, signalling contained demand-side pressures in housing, health, and communication. This divergence between food and precious metals volatility versus relatively stable core highlights that while headline prints remain sensitive to supply shocks and asset price surges, underlying inflation dynamics are still benign," added Chaturvedi.

Crude Oil Supply Crunch Amid Iran-US War Pose Inflationary Risk

While inflation rate remained under control in February, experts warn that there could be a significant jump in March due to crude oil prices rally amid ongoing Iran-US war.
"The recent spike in oil and gas prices raises some upside risks to inflation in the coming months. However, these pressures are likely to be transitory. If anything, the RBI may respond with a more accommodative liquidity stance to smoothen financial market volatility arising from geopolitical uncertainties," explained Sujan Hajra, Chief Economist, Anand Rathi Group.