NEW DELHI, Dec 13: India’s retail inflation has shown a marginal reversal in November 2025 but remains at a comfortable level, with overall price pressures still muted, according to SBI Research’s latest Ecowrap report released today here.
The SBI report notes that CPI inflation increased to 0.71 per cent in November from 0.25 per cent in October, mainly due to a rise in food and fuel prices. Food and beverages inflation, which had been in sharp deflation earlier, saw the pace of decline ease in November.
While prices of vegetables, pulses and spices continued to fall, inflation in fruits moved higher, contributing to the slight uptick in the headline number.
SBI Research highlights that fuel and light inflation also edged up to 2.32 per cent, adding to the increase. At the same time, prices in the miscellaneous category declined, except for personal care and effects, where inflation rose sharply because of higher gold prices.
The report points out that gold inflation remained extremely high at 58 per cent in November. Importantly, if gold is excluded from the CPI basket, headline inflation turns negative, indicating that domestic inflationary pressures are still largely absent.
On the impact of GST rationalisation, the SBI report revises earlier expectations. While initial estimates had suggested that GST changes could lower CPI inflation by around 85 basis points, a detailed item-wise analysis now shows that the actual reduction so far has been around 25 basis points during the September-November period.
SBI Research believes this estimate does not fully capture the impact of e-commerce discounts following GST cuts and expects the total reduction in CPI due to GST to reach about 35 basis points in FY26.
The report also discusses rural and urban inflation trends, noting that differences persist due to varying consumption patterns and supply dynamics. Rural food inflation, which usually remains higher because of a larger food component, has shown signs of easing, while urban food inflation has seen some increase in categories such as cereals, milk products, beverages and prepared foods.
In November, rural inflation stood at 0.10 per cent, while urban inflation was higher at 1.40 per cent.
SBI Research draws attention to Kerala’s inflation, which remained elevated at 8.27 per cent in November. The report attributes this largely to higher prices of gold, silver, and oils and fats, which have a higher consumption share in the state.
It also notes that government market interventions have helped moderate inflation from earlier peaks.
Another key concern flagged in the report is imported inflation. SBI Research says the imported component of the CPI basket has risen to 1.6 per cent, driven mainly by gold and oils and fats.
However, the current low headline inflation does not yet reflect the full build-up of imported inflationary pressures, especially in the context of a depreciating rupee.
Looking ahead, SBI Research expects inflation to rise gradually but remain manageable. The report forecasts CPI inflation at 1.8 per cent in FY26 and 3.4 per cent in FY27, supported by lower food inflation due to higher kharif production, healthy rabi sowing, adequate reservoir levels and favourable soil moisture.
Given this outlook, SBI Research does not see any immediate change in the RBI’s policy stance and expects interest rates to remain lower for longer, at least through the February policy review.
(UNI)
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