India's CPI inflation subdued in Jan 2026; Telangana an outlier: SBI

India's CPI inflation remained low across most states in January 2026, with many below 3%, according to an SBI Research report. Telangana was a significant outlier, recording the highest inflation at 4.9% due to structural economic shifts.

Most States See Low Inflation, Telangana Bucks Trend

India's Consumer Price Index (CPI) inflation remained subdued across most states in January 2026, under the new CPI series, with the majority reporting inflation below the 3 per cent mark, according to a report by SBI Research. The report noted that only a few states recorded higher inflation levels, with Telangana posting the highest CPI inflation at 4.9 per cent, significantly above the national average.

The state-wise analysis shows that inflation trends remain moderate across India. Most major states registered CPI inflation below 3 per cent in January 2026, indicating stable price pressures at the regional level. However, Telangana stood out with the highest inflation reading among states at 4.9 per cent, suggesting stronger price pressures compared with the national average.

New CPI Series Reveals Inflation Shifts

The report also compared the new CPI series with earlier inflation data and found noticeable shifts in state-level inflation trends. Kerala recorded a decline in CPI inflation from 8.05 per cent earlier to 6.37 per cent under the new series, indicating moderation in price pressures. In contrast, Telangana and Bihar witnessed increases in inflation. Telangana's inflation rose from 0.20 per cent earlier to about 4.91 per cent, while Bihar's increased from 0.01 per cent to about 2.49 per cent under the revised data series.

Analysis of Telangana's High Inflation

A division-wise comparison of CPI inflation shows Telangana experiencing higher inflation than the all-India average across 11 out of 12 CPI divisions. These divisions include categories such as food and beverages, housing and utilities, health, transport, education, and services. The report said this broad-based price rise highlights structural differences in the state's consumption basket compared with the national average.

The report attributes part of Telangana's inflation dynamics to structural economic changes following the bifurcation of the erstwhile united Andhra Pradesh. Since the split, Telangana has become a predominantly service-oriented economy, with the tertiary sector accounting for about 67 per cent of its Gross Value Added, compared with around 42 per cent in Andhra Pradesh. This shift towards services is believed to influence the composition of the CPI basket and inflation patterns in the state.

Core CPI Trends Across States

The report also analysed core CPI (excluding food and fuel) across states. It found that in most states, core inflation was higher than headline inflation, although it remained lower than the all-India core CPI level of 3.38 per cent. (ANI)

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