Experts said the divergence is being driven largely by food inflation and differences in consumption patterns across States | Photo Credit: SUSHIL KUMAR VERMA

All five southern States recorded CPI inflation above the national average in April 2026. Experts think that this could be due to the consumption of higher value-added products given the higher per capita income, the logistic cost of transporting goods produced in the rest of the country and the composition of the consumption basket.

businessline’s analysis of MoSPI’s data reveals that Telangana recorded the highest inflation at 5.81 per cent, followed by Andhra Pradesh (4.2 per cent), Tamil Nadu (4.18 per cent), Karnataka (4 per cent) and Kerala (3.77 per cent), all above the all-India CPI inflation average of 3.48 per cent.

Southers States experienced high inflation last year, too. Between April 2024 and April 2025, Kerala recorded the highest average inflation among all States at 5.88 per cent, followed by Karnataka at 4.86 per cent and Tamil Nadu (4.54 per cent), all above the all-India average inflation rate of 4.51 per cent.

Several large States remained below the national average in April 2026. Chhattisgarh recorded inflation of 1.77 per cent, Delhi stood at 1.96 per cent, while Bihar and Gujarat reported inflation of 2.74 per cent and 2.85 per cent, respectively.

Why is South facing higher inflation?

Experts said the divergence is being driven largely by food inflation and differences in consumption patterns across States.

“During April, the variation is largely driven by food inflation, which was between 5 and 6 per cent in the South,” said Prof Anil Sood, Institute for Advanced Studies in Complex Choices (IASCC). He added that recreation, restaurants and accommodation, health and education services also contributed to inflation in southern States.

Madan Sabnavis, Chief Economist, Bank of Baroda, said food prices tend to be more volatile across States because of differences in agricultural production and transportation costs. “Every State does not grow all crops. So, what doesn’t grow has to come from other States. There are transport and storage costs as well,” he said.

South Indian States also consume a higher proportion of gold, whose price has witnessed a sharp increase in the last two years.

Long-term data

The longer-term data also points to persistent inflationary pressures in the South. Between April 2025 and April 2026, Kerala recorded the highest average inflation at 6.69 per cent, sharply above the all-India average of 2.18 per cent. Karnataka recorded average inflation of 3.25 per cent, while Tamil Nadu stood at 2.84 per cent.

Sood noted that inflation in southern India is structurally higher because “the consumption basket comprises higher value-adding products, where pricing power is usually with producers.” He added that productivity growth and stronger competition would be crucial to moderating inflationary pressures in these States.

Published on May 14, 2026