We investigate the importance of time varying trend inflation in explaining the inflation process in the two emerging economies, China and India. Our analysis is based on an unobserved components stochastic volatility model of inflation. We decompose inflation into permanent stochastic trend and transitory component. We find that trend inflation has been the dominant factor for determining inflation in China and India since 1990s. We also investigate the time varying volatility of inflation using a constant mean stochastic volatility model. The results suggest that during the years from 2000 - 2008, trend inflation was most stable and also volatility was the least and during the Great recession there was an increase in both the trend inflation and volatility.