Wholesale inflation at 13-month low
A disaggregated analysis of the WPI data shows that wholesale inflation fell mainly on account of a deflation in the primary articles subcategory
India’s wholesale inflation, as measured by the Wholesale Price Index (WPI), fell to the lowest in 13-months at 0.9% in April, a sharp fall from 2.1% in March, according to data released by the Ministry of Commerce and Industry on Wednesday. On a month-on-month basis, the WPI contracted by 0.2%, making it the sixth consecutive month that the index has sequentially contracted. April’s WPI print was lower than a projection of 1.5% by a Bloomberg poll of economists.
A disaggregated analysis of the WPI data shows that wholesale inflation fell mainly on account of a deflation in the primary articles subcategory – it has a 22% share in the overall WPI basket – which includes both food items and crude oil. This sub-head contracted on an annual basis for the first time since June 2023. A deflation in food articles, specifically vegetables, was what pulled down inflation in the primary articles category. Among primary food articles, pulses and vegetables contracted by 5.6% and 18.3%, respectively. Inflation in cereals also eased to 3.8% from 5.5% in March.
Disinflation in crude petroleum and natural gas doubled as the subcategory contracted by 15.6% compared to 7.6% in March. This is the eighth straight month that this subcategory has been in disinflation. “Crude oil prices have generally remained in the USD60-65/ barrel handle in April, with downward pressure arising from OPEC+ announcing production increases. This could likely add further downside to the WPI sub-index, alongside continued favourable base effects”, Aastha Gudwani, India Chief Economist, Barclays said in a note.
Inflation in the fuel and power category contracted by 2.2% in April 2025. This had seen an expansion of 0.2% in March after being in disinflation for seven consecutive months.
Inflation in manufactured products, which has the highest weightage of 64.2% in the index, fell to 2.6% from 3.07% in March. Within manufactured products, inflation decreased in both food and non-food products. In manufactured food products, which comprise 14% of the basket of manufactured products, inflation fell to 9.4% from 10.8% in March. In non-food manufactured products, April inflation was 1.3%, down from 1.6% in March.
As inflation in both primary food articles and manufactured food items fell, inflation in the overall food group also eased to 2.6% in April 2025 from 4.7% in March.
The fall in WPI comes after Tuesday’s retail inflation data which fell to a six-year low in April on account of falling food and vegetable prices, increasing prospects of a rate cut in the next RBI Monetary Policy Committee meeting.
