Page 15 - Policy Economic Report - Feb 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Inflation in India

• The food inflation for January has estimated to be 2.13 per cent, and housing at 2.05 per cent.
The retail inflation, under the old series with base year 2012, was 4.26 per cent in January 2025
and 1.33 per cent in December. Headline inflation in rural areas during January was 2.73 per cent
and in urban India 2.77 per cent, according to NSO data.

• The new series released by the National Statistics Office (NSO) under the Ministry of Statistics &
Programme Implementation has increased the number of goods from 259 to 308 and services
from 40 to 50 to provide a better picture of the price situation.

• According to the new CPI series, Telangana had the highest inflation at 4.92 per cent, followed by
Kerala and Tamil Nadu.

• According to the data, the top 5 items with low inflation in January were garlic, onion, potato,
arhar, tur dal, and peas. On the other hand, high inflation was in silver jewellery, tomato, coconut-
copra, gold, diamond, platinum jewellery, and coconut oil.

India PMI

• The HSBC Flash India PMI Composite Output Index, which measures the month-on-month change
in the combined output of India's manufacturing and service sectors, indicated continued strong
growth momentum across the private sector.

• India's private sector activity strengthened further in February, with the HSBC Flash India PMI
Composite Output Index rising to 59.3 from 58.4 in January, marking the strongest rate of
expansion in three months, according to data released by HSBC.

• According to HSBC, the acceleration in growth was driven primarily by a quicker increase in factory
production, while the services sector maintained a broadly similar pace of expansion as seen at
the start of the 2026 calendar year.

• The data showed that private sector companies in India reported faster increases in total new
orders and international sales during February. This improvement in demand encouraged
companies to recruit additional staff and increase output levels. Businesses also expressed
improved optimism toward growth prospects, reflecting confidence in sustained economic
activity in the coming months. However, the expansion was accompanied by rising inflationary
pressures, as both input costs and selling prices increased at faster rates.

• The manufacturing sector showed particularly strong performance, with the HSBC Flash India
Manufacturing PMI rising to 57.5 in February from 55.4 in January. The reading remained well
above the neutral threshold of 50.0 and its long-run average of 54.2, indicating strong expansion
in manufacturing activity. The HSBC Flash India Services PMI Business Activity Index stood at 58.4

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