Digital inflation surges as mobile phones, laptops turn costlier; price pressures spread across consumption basket

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Inflation in digital products accelerated sharply in October, with mobile phones, laptops and other electronic devices recording faster price increases, even as price pressures spread across India's consumption basket.

A Moneycontrol analysis shows that inflation in mobile handsets rose to 8.65 percent in October from 5.83 percent in September, while inflation in personal computers, laptops, tablets and related peripherals climbed to 8.61 percent from 6.46 percent.

The acceleration marks a significant reversal from the beginning of the year, when mobile handset prices were declining by 2.31 percent year-on-year and computers and laptops recorded deflation of 1.12 percent in January.

Demand for data centres and geopolitical uncertainties have pushed up costs for memory chips.

Price pressures were also broader across the consumption basket. Of the 358 items examined, 95 recorded inflation above 6 percent in October, compared with 80 in September.

The sharpest increase among digital products was recorded in pen drives and external hard disks, where inflation rose to 22.03 percent in October from 19.26 percent in September.

Television inflation accelerated to 4.94 percent from 0.76 percent, while prices of headphones, earphones and Bluetooth devices rose 2.67 percent year-on-year, compared with 1.71 percent in September.

However, price pressures were less pronounced in digital services. Inflation in internet expenses remained relatively subdued at 0.50 percent, while inflation in online streaming services was unchanged at 2.03 percent.

Price pressures become more widespread

The acceleration was not restricted to digital goods. Of the 358 items tracked, 296 recorded a higher inflation rate in October than in September, while just 51 saw a decline and 11 remained unchanged.

The number of items recording inflation above 6 percent has more than doubled since January, when only 40 items exceeded that threshold.

Food prices remained a major source of inflationary pressure, with onion inflation rising to 116.22 percent and garlic inflation climbing to 60.74 percent. Airfare inflation also jumped to 43.23 percent from 29.90 percent in September.

The broadening of price pressures coincided with India's headline retail inflation rising to 6.09 percent in October from 5.54 percent in September, breaching the RBI's 6 percent upper tolerance limit.

Food inflation accelerated to 8.94 percent from 7.74 percent, according to data released on November 12.

The simultaneous increase in food, digital products and several household durable goods suggests that inflationary pressures are extending beyond a handful of essential commodities.