According to estimates provided by SBI Research, the decrease in the Consumer Price Index (CPI) or retail inflation as a result of the significant GST rate rationalization has been around 25 basis points as far in the September–November 2025 period.
GST Eases Inflation Pressures
India’s CPI inflation has decreased as a result of GST rationalization. SBI Research has previously calculated that the GST might have an effect on the CPI of around 85 basis points.
“However, item-by-item computation presently reveals that the drop in CPI inflation owing to GST has been roughly 25 basis points so far in the Sep-Nov’25 period,” the SBI Research research said.
“We think that this effect does not take into consideration the discounts on online purchases, which may be greater due to the lower GST. According to the research, “we think that the overall drop in CPI due to GST might be 35 bps (basis points) in 2025–2026.”
Kerala Inflation Stays Elevated
Kerala’s inflation rate in November 2025 was 8.27%, with rural inflation at 9.34% and urban inflation at 6.33%. The state’s high use of gold, silver, oil, and fats is probably a contributing factor. Given the weakening of the rupee, future inflation in India is anticipated to increase much more.
SBI Research predicts that inflation would be 1.8% in 2025–2026 and 3.4% in 2026–2027, although it sees no change in the RBI’s position on current rates, at least not for the February monetary policy.
India’s CPI inflation trend reversed, climbing slightly from 0.25 percent in October 2025 to 0.71 percent in November 2025 and predicted to reach 2.7 percent in March 2025, according to the SBI research.
