MUMBAI, Jan. 13 -- With December witness to the expected sharp drop in headline retail inflation, markets have gotten the much needed relief but it may be too soon to rejoice as new pressure points are building up.

Headline consumer price index inflation fell to 4.59% in December, having uncomfortable staying 6% for eight straight months. The main contributor to this decline was a big fall in vegetable prices and a favourable base. Vegetable prices slipped into disinflation in December, something that economists and the Reserve Bank of India (RBI) had anticipated. This led to food inflation coming down by 5.02 percentage points. This disinflation is expected to continue in January as well before the base effect wears off, according to ec...