India will start sourcing price data directly from e-commerce giants including Amazon (AMZN.O), opens new tab and Walmart-owned Flipkart to overhaul its benchmark inflation gauge, aiming to capture shifting consumption habits and address concerns that current data is outdated, the head of the statistics ministry said.
The move could make India's retail inflation data more robust by accounting for prices on online platforms as their share in household spending rises. The shift mirrors a global trend, with countries from the U.S. to South Korea integrating scanner and online prices into inflation measures.
India had about 270 million online shoppers in 2024, a figure projected to grow 22% annually, a private study, opens new tab showed.
"The statistics ministry has begun scraping prices from e-commerce websites in 12 cities with populations above 2.5 million and is in talks with platforms to access data directly," Saurabh Garg, secretary of the Ministry of Statistics and Programme Implementation, said in an interview.
E-commerce is a growing share of household spending and the Household Consumption Expenditure Survey (HCES) shows it's significant enough to be reflected in the CPI basket, said Garg, adding that the aim is to make the index more representative and timely.
E-commerce firms are being asked to share weekly average prices of goods with the government, which will then be cross-checked against a broader dataset to guard against any skews.
The additional data sources will be included in the computation of CPI when a new series is rolled out early next year, which will also see a shift in weightages as a recent consumption survey showed that Indians were spending a lower share of their budget on food.
The revamp of the index will also include data on airfares and streaming-media prices from online sources, which are dominant in these consumption segments.
BROADER STATISTICAL OVERHAUL
The changes in sources and items in the new CPI is one of several major statistical upgrades planned in the next two years including a new GDP series with an updated base year of 2022-23, Garg said.
Earlier this year, it launched an investment survey and more frequent employment reports, which some economists have questioned for their accuracy.
Garg said the government has nearly doubled the households surveyed for monthly employment reports from about 45,000 earlier.
"The larger sample for monthly periodic labour force survey, thus, ensures that even on a monthly basis, the estimates are precise and robust for making informed decisions," he said.
"Furthermore, the measurement framework of the PLFS is aligned with internationally recognized standards, ensuring comparability and credibility."
The ministry is now designing a new Index of Services Production (ISP) as a quarterly gauge of output in the services sector, which accounts for more than half of India's GDP but is tracked far less frequently than manufacturing, Garg said.
"This is likely to be rolled out from the middle of next year," he said.
