Kerala Sees Growing Inflation at 7.3%, India’s Rate Drops to 3.6%

India's inflation rate dropped to a 7-month low of 3.6% in February, but several states continue to face elevated inflation, according to an SBI research report. Kerala recorded it's highest inflation at 7.3%, followed by Chhattisgarh at 4.9%. 

Amongst major states, rural inflation exceeded the national rural inflation rate in 9 states, while urban inflation surpassed the national urban rate in eight states. Tamil Nadu has persistently experienced inflation higher than the national average in 9 of the last 13 years, while Gujarat and Punjab have kept inflation below the national average during this period.

Even though the overall decline in national inflation, state-level discrepancies persist. Anyways, inflation across states seems to be stabilizing within a 3-6% range, a notable improvement from the 6-12% range seen in FY14. 

With inflation trends remaining mild, a cumulative rate cut of at least 75 basis points is anticipated, with additional reductions most probably in April and August 2025. If inflation is under control, further rate cuts may be introduced from October 2025 onwards, which will provide relief to both consumers and businesses.

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