India to Use Amazon & Flipkart Prices in New Inflation Measure

Post by : Monika

Photo: Reuters

India is bringing big changes to the way it measures prices, inflation, and economic activity. For many years, the government tracked the cost of items like food, clothing, and household goods by collecting prices from physical shops and markets across the country. But now, India has decided that this old method is no longer enough.

Why? Because shopping habits have changed. Millions of Indians now shop online instead of only visiting their local stores. Companies like Amazon and Flipkart have become household names. Almost everything—groceries, clothes, electronics, and even tickets for travel—can be bought with just a few clicks on a phone.

To make sure economic data reflects this new reality, India will now collect price data directly from online platforms such as Amazon and Flipkart. This will make inflation numbers more accurate and up to date. The change is part of a larger plan to upgrade India’s economic statistics, which will also include new surveys and tools to measure jobs, services, and overall growth.

Why the Change is Needed
Online Shopping Boom

Online shopping in India has exploded in recent years. In 2024, about 270 million people shopped online. Experts say this number will grow by about 22% every year, meaning hundreds of millions more will join in soon.

The old system of collecting inflation data did not include online prices. This meant that while people were buying things online at different prices, those changes were not being captured in the official inflation numbers. The government realized that this gap could make inflation figures less reliable.

Real-Time Price Tracking

To fix this, India’s statistics office will now use a process called price scraping. This means computers will automatically collect prices of items directly from online platforms. For example, the cost of rice, mobile phones, or clothes listed on Amazon and Flipkart will be tracked regularly.

Officials plan to collect this data from 12 major cities across India. Prices will be averaged weekly, giving a much clearer picture of how fast costs are changing in real time.

How the New Inflation System Will Work
The Consumer Price Index (CPI)

At the heart of this change is the Consumer Price Index (CPI). The CPI is a key tool that measures inflation—basically how much prices of common goods and services go up or down over time.

For example, if you buy the same packet of milk today for 50 rupees and it costs 55 rupees next month, that increase is part of what the CPI tracks.

Currently, CPI is based mostly on food and essential items from physical stores. But Indian spending patterns have shifted. People are spending less on food and more on services like travel, education, healthcare, entertainment, and digital subscriptions.

What Will Change in CPI

• More focus on services – Services like airline tickets, online streaming, transport, and education will now play a bigger role in CPI.
• Online data included – Prices from Amazon and Flipkart will be directly added to the data set.
• Faster updates – Instead of waiting weeks for physical market surveys, online prices will allow for quicker and more regular updates.
• This means CPI will not only measure the cost of rice, sugar, or onions, but also reflect the rising or falling costs of Netflix subscriptions, Uber rides, and air travel.

Other New Economic Tools

The Indian government is not only updating inflation data—it is also improving the way it measures jobs, services, and overall economic growth.

1. New GDP Base Year

Gross Domestic Product (GDP) is the total value of everything a country produces in a year. Right now, India’s GDP is measured using older data that does not fully reflect the current economy. The government will now update the GDP calculation using 2022–23 as the new base year.

This will make GDP figures more relevant and show more clearly how the economy is growing.

2. Employment Survey

Jobs are one of the most important parts of any economy. India already has surveys on employment, but the coverage was limited. Now, the government will expand its monthly employment survey to cover nearly 90,000 households.

This will give a clearer and more detailed picture of how many people are employed, unemployed, or underemployed, and in which sectors jobs are increasing or shrinking.

3. Services Production Index

Services are the backbone of India’s economy. They include things like education, health care, banking, technology, and transportation. In fact, the services sector makes up more than half of India’s total economy.

To track this better, the government will launch a quarterly Services Production Index. This will monitor how much the services sector is producing, growing, or slowing down.

The new index is expected to start around mid-2026.

Why These Changes Matter

These changes are not just technical updates for economists—they will affect how everyone understands India’s economy.

1. More Accurate Inflation Numbers

When inflation is measured without online prices, it leaves out a huge part of how people actually spend their money. Adding Amazon and Flipkart prices will give a more real picture of what families are paying every day.

For example, if the price of a smartphone drops online, it should reduce inflation numbers. If food delivery prices rise, that too should be reflected in the CPI.

2. Better Policy Decisions

Accurate data is crucial for making the right government policies. If the government knows exactly how fast prices are rising, it can adjust interest rates, subsidies, and welfare programs.

For example:

• If food prices go up sharply, the government may release more food stocks.
• If transport costs rise, it may decide to cut fuel taxes.

3. Reflecting Real Spending Habits

The old CPI gave more weight to food, but today’s middle-class families spend more on travel, education, digital subscriptions, and healthcare. Updating the CPI basket makes it more realistic and relevant.

4. Stronger Economic Planning

With a new GDP base year, better employment data, and service sector tracking, India will have a much clearer view of its economy. This helps in long-term planning, attracting investments, and creating jobs.

A Look Into the Future

This new way of measuring inflation and economic activity puts India in line with other modern economies that already use digital data. Countries like the United States and those in Europe are also adapting their systems to track online spending and services more accurately.

For India, with its huge population and fast-growing digital economy, this shift is even more important. By 2030, India is expected to have more than 600 million online shoppers. Ignoring this trend would make old economic methods outdated.

The change also shows that India is preparing for a more digital-first economy, where online shopping, digital payments, and services dominate daily life.

India is upgrading the way it measures inflation and economic activity by directly using price data from Amazon and Flipkart. This shift will make the Consumer Price Index (CPI) more accurate and reflect modern spending habits.

At the same time, the government is launching a new GDP base year, an expanded employment survey, and a Services Production Index. Together, these changes will provide a clearer, faster, and more reliable picture of India’s economy.

For ordinary people, this means inflation numbers and economic reports will better reflect what they experience in real life—whether it’s buying food, booking a ticket, or paying for online services.

Amazon price data