Wholesale price inflation (WPI) in India eased to 0.13% in September 2025, reflecting a moderation in prices of food articles and manufactured goods, government data showed on Tuesday. This marks a decline from 0.52% in August and 1.91% in September 2024.
The Ministry of Industry and Commerce stated that the positive inflation rate in September 2025 was primarily driven by price increases in the manufacture of food products, other manufacturing, non-food articles, other transport equipment, and textiles.
Food Prices Lead Deflation
According to the WPI data, food articles saw deflation of 5.22% in September, compared with 3.06% in August. Vegetables experienced significant price declines, with deflation of 24.41%, up from 14.18% in August.
The moderation in food prices was supported by strong agricultural output and government measures to stabilize the retail prices of essentials. PHDCCI CEO Ranjeet Mehta noted that the fall in primary article prices and food costs was a major factor behind the low overall inflation in September.
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Manufactured Products and Fuel
In the manufacturing sector, inflation eased to 2.33%, down from 2.55% in August.
Fuel and power saw continued deflation, with negative inflation of 2.58%, improving slightly from 3.17% in the previous month.
Mehta added that stable global commodity prices, favorable supply-side conditions, and a good monsoon also contributed to the moderation in wholesale prices. The arrival of rabi crops in the coming months is expected to help keep food inflation contained.
Core Inflation and Jewellery Prices
While overall WPI inflation remained subdued, core inflation rose to a 31-month high of 1.9% in September 2025, driven by a record 34.1% year-on-year rise in jewellery prices, according to Paras Jasrai, Associate Director at India Ratings and Research.
Quarterly Trends and Outlook
Wholesale inflation remained flat at 0.02% in Q2 FY26, reaching an eight-quarter low. Jasrai noted that record-low retail inflation combined with subdued WPI is likely to result in muted GDP deflator growth, putting pressure on corporate margins in Q2 FY26.
Looking ahead, favorable base effects are expected to push the wholesale index back into deflation in October 2025, with Ind-Ra projecting around 0.5% deflation.
Expert Views
Barclays India Chief Economist Aastha Gudwani said that lower global commodity prices are likely to keep WPI inflation subdued for an extended period.
Jasrai added that the near-term inflation trajectory is expected to remain weak, with a possible pickup by the end of FY26. There is potential for another 25 basis point cut in the repo rate, depending on incoming data, including the impact of effective GST rates.
RBI and Retail Inflation
The Reserve Bank of India (RBI), which monitors retail inflation, maintained the benchmark policy rate at 5.5% earlier this month.
Retail inflation fell to an eight-year low of 1.5% in September 2025, supporting the view that inflationary pressures are easing across both wholesale and retail levels.
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