According to a report by SBI Research, GST reforms could reduce retail inflation by up to 35 basis points in 2025-2026, with the impact already visible in the last few months.The report quoted by news agency ANI estimates that the Consumer Price Index (CPI) or retail inflation fell by around 25 basis points during September-November 2025 due to major adjustments in GST rates. SBI Research had earlier forecast that GST changes could impact CPI inflation by up to 85 basis points.“However, the line-item calculation now shows that the fall in CPI inflation due to GST has been around 25 basis points so far during September-November 2025,” the report said.
SBI Research noted that the actual impact of GST reforms on inflation could be greater as current estimates do not fully take into account the discounts offered on e-commerce sales after tax cuts.“We believe that this impact does not take into account the discounts on e-commerce sales, which could be higher due to GST reduction. We believe that the overall reduction in CPI due to GST could be 35 basis points (basis points) in 2025-26,” the report said.At the state level, Kerala recorded a retail inflation rate of 8.27 per cent in November 2025, with rural inflation at 9.34 per cent and urban inflation at 6.33 per cent. According to the report, higher inflation in Kerala was largely driven by rising prices of gold, silver and oil and fats, which have a higher consumption weight in the state.The report also warned that rupee depreciation could increase inflationary pressures in the future.Looking ahead, SBI Research expects inflation to average 1.8 percent in 2025-26 and 3.4 percent in 2026-27. Despite these forecasts, the report does not foresee any change bank-of-india" styleobj="[object Object]" class="" commonstate="[object Object]" frmappuse="1">Reserve Bank of India‘s current interest rate policy in the monetary policy review in February.At the national level, CPI inflation rose from 0.25 percent in October 2025 to 0.71 percent in November 2025, with SBI Research forecasting inflation of 2.7 percent by March 2025.
