CPI Inflation: Most States Below 3% in Jan 2026

What the SBI Research note flagged

India’s Consumer Price Index (CPI) inflation stayed subdued across most states in January 2026 under the new CPI series, according to a report by SBI Research. The state-wise picture pointed to generally moderate price pressures at the regional level. Most major states reported CPI inflation below 3%, which the report read as a sign of stability in local inflation conditions. A small set of states, however, printed higher readings than the rest. Telangana stood out at the top of the chart, with CPI inflation around 4.9% in January. SBI Research described this as significantly above the national average.

January 2026: Most states below 3%, a few above

The report’s core finding was the clustering of state inflation prints below 3% in January 2026. This matters because state-wise inflation can diverge even when the national print looks contained. The SBI Research assessment said the overall trend remained moderate across India. Still, the outliers helped show where price pressures were relatively stronger. Telangana emerged as the highest inflation state in the month. Alongside Telangana, a few other states were cited with readings above 3%, such as Kerala and Tamil Nadu.

Telangana at 4.92%: a sharp turnaround

Telangana’s January inflation was reported at about 4.91% to 4.92%, the highest among states. The move was also notable because Telangana had recorded negative inflation in recent months, before turning sharply higher. The report highlighted that Telangana’s inflation rose from about 0.20% earlier to about 4.91% under the revised data series. Separate reporting in the same context described Telangana’s January reading of 4.92% as nearly double the national average of about 2.75%. That placed Telangana above a referenced Reserve Bank of India (RBI) “recommended range” of 2% to 3% for inflation in the state-level discussion. The print therefore drew attention to stronger price pressures in Telangana than in most other regions.

How other states compared in January

Along with Telangana, a set of large states were listed with January inflation readings. Kerala followed at 3.67%, Tamil Nadu at 3.36%, Rajasthan at 3.17%, and Karnataka at 2.99% for January. Bihar was also mentioned as seeing an increase, with inflation rising from about 0.01% earlier to about 2.49% under the revised data series. The ordering in January marked a change from earlier patterns, as Kerala had been identified as the highest inflation state for 12 consecutive months before January, based on the cited reporting. January therefore represented a reshuffle at the top of the state-wise table, even as the broader theme remained that inflation was low in most states.

National print under the new series: 2.75% for January

At the national level, inflation was presented as higher under the new series compared with the old series baseline referenced in the story. As per the old series, inflation in December was 1.33%. Under the revised base year calculation, the national inflation reading increased to 2.75% in January. Even with that rise, it was described as well below the RBI’s 4% tolerance level in the same reporting. This national context helps explain why Telangana’s 4.92% reading drew focus, because it stood notably above the all-India number.

Why the gap versus the average matters

The data discussion also pointed to how far the highest state reading sits above the broader average across large states. In January, Telangana’s value at 4.92% was stated to be 2.35 percentage points more than the average value across large states. That gap was reported as smaller than an earlier period where the difference was 8.2 percentage points between the highest value of 9.49% for Kerala and the average across large states. The comparison was used to show that dispersion in state-wise inflation can widen or narrow over time. For investors and policy watchers, such dispersion can influence how local consumption conditions and cost pressures are interpreted across regions.

Background: FY2024-25 state averages showed elevated pockets

The broader context in the material also referenced fiscal year 2024-2025, when some states were said to have consistently exhibited elevated inflation above the national average. The overall average CPI inflation for April 2024 to April 2025 was reported at 4.51%. Kerala’s 12-month average inflation rate was listed at 5.88%, followed by Bihar at 5.79%, Odisha at 5.72%, and Chhattisgarh at 5.57%. In the same backdrop, Kerala’s monthly inflation was cited as peaking at 7.31% in February 2025, linked to rising food and service costs. Karnataka was also mentioned as reaching a high of 6.11% in May 2024. These historical datapoints underline that state-level inflation leadership can shift sharply from one period to another.

Market impact: what low, uneven inflation signals

A month where most states are below 3% points to relatively stable price pressures across a wide base of the country, which can support household purchasing power and consumption stability. At the same time, Telangana’s 4.92% reading shows that pockets of inflation can run hotter than the national print. Such divergences matter for investors tracking consumption-facing businesses, because demand conditions can vary by geography even within the same quarter. The national reading of 2.75% under the revised series provides a low reference point, making state outliers more visible. The report-led framing also keeps the focus on how a change in CPI series and base year can alter perceived inflation trends.

Key numbers at a glance

What to watch next

The SBI Research assessment for January 2026 points to a broadly benign inflation picture across most states, with a few notable exceptions. Telangana’s move from near-zero levels in the cited earlier period to about 4.91% to 4.92% in January is the key state-level development highlighted. The national shift from 1.33% (old series, December) to 2.75% (new series, January) also frames how the revised calculation changes the inflation narrative. Going ahead, the key monitorable will be whether states that spiked in January continue to show higher price pressures in subsequent monthly CPI releases under the new series.