Netflix, Uber, smartphones: The items entering India's retail inflation basket

From Uber trips to Netflix subscriptions and digital devices, India will soon start counting a host of new goods and services to determine its retail inflation. Simultaneously, items such as video-cassette recorders and audio cassettes will be removed from the consumption basket, relics of entertainment that have disappeared from India's living rooms long ago.

India will shift to a new consumer price index (CPI) series with 2024 as the base year from 12 February, the Union statistics ministry said on Thursday. This comes after an expert group recommended a comprehensive overhaul of CPI to reflect changing household consumption patterns, new services, and global best practices in inflation measurement.

The expert group report released on Thursday outlined wide-ranging methodological, structural and data-collection reforms aimed at making inflation data more accurate, credible and globally comparable.

What will change

Under the new series, the CPI basket will swell from 299 to 358 weighted items, mapped across 12 divisions, 43 groups, 62 classes and 192 subclasses, using consumption data from the Household Consumption Expenditure Survey (HCES) 2023-24. The new CPI will include modern and emerging consumption items such as smartphones and digital devices; OTT (over-the-top) and online media services; app-based transport services; international airfares; and rural house rents. Outdated products such as VCRs and audio cassettes will be dropped.

To improve data quality and reduce field-level burden, the expert group recommended wider use of technology and administrative data sources. Prices from 12 major e-commerce platforms will be tracked weekly, while centrally administered prices—such as fuel, rail fares, telecom services and postal charges—will be compiled directly by the statistics ministry, using official data.

Data collection

Electricity tariffs will be collected for four standard consumption slabs across all discoms, while airfare pricing will reflect advance booking windows of 21 days for domestic and 60 days for international travel, mirroring actual consumer behaviour.

The report also recommends switching to Jevons’ short index formula at the elementary level for better quality adjustment; Improved treatment of missing prices through imputation rather than weight redistribution; inclusion of a rural house rent index and correction of anomalies seen in the earlier series; standardized pricing of gold and silver jewellery based on commonly available designs.

Free food items distributed under Pradhan Mantri Grameen Kalyan Anna Yojana will not be counted, in line with global norms that CPI should reflect only actual household expenditure. Employer-provided accommodation will also be excluded from the CPI 2024.

Why now

The expert group, comprising economists from leading academic institutions, senior officials from the Reserve Bank of India (RBI) and the central government, said the existing CPI 2012 series no longer fully captures how Indian households spend, particularly with the rise of digital services, e-commerce, app-based transport and changing housing patterns.

According to the report, household consumption behaviour in India has undergone a structural shift over the past decade, driven by urbanization, digitization, higher spending on services and new delivery channels such as online platforms. Continuing with an outdated consumption basket risks misrepresenting inflation trends, weakening monetary policy signals and distorting welfare assessments.

The revision is also aimed at aligning India’s inflation framework with international statistical standards, especially the classification of Individual Consumption According to Purpose (COICOP) 2018, used widely by advanced and emerging economies.

“The objective is not just a routine base change, but a comprehensive modernization of the CPI framework,” the report noted.

How the new CPI will help

The new CPI series is expected to provide a truer picture of inflation, especially services inflation improving the effectiveness of RBI’s monetary policy decisions. It will also enhance state-level and item-level inflation analysis and increase transparency and credibility for investors and global institutions.

MoSPI will also release back-series data from January 2013 to ensure continuity between CPI 2012 and CPI 2024, along with detailed item-level indices across states and rural-urban segments.

The first CPI 2024 release will provide inflation data for January 2026, alongside historical indices from January 2025 onwards.

The CPI revision forms part of a broader statistical upgrade, with a new GDP series (base year 2022-23) also scheduled for release in February 2026, signalling a major refresh of India’s core economic indicators.