Wholesale Inflation Rises to 0.52% in August After Two Months of Decline

India’s wholesale inflation, measured by the Wholesale Price Index (WPI), returned to positive territory in August 2025 after remaining in the negative zone for two consecutive months. The Ministry of Commerce and Industry released the WPI data on Monday, September 15, showing that the index stood at 0.52 percent in August, a four-month high.

In July 2025, wholesale inflation was at a two-year low of -0.58 percent, while in June it had fallen to -0.13 percent, marking a 20-month low. The rise in August indicates a reversal of the deflationary trend, driven mainly by higher prices of food products, non-food articles, other manufacturing goods, non-metallic mineral products, and transport equipment.

WPI vs CPI: Understanding the Difference

The Wholesale Price Index tracks the change in prices of goods that wholesale businesses sell in bulk to other companies. This differs from the Consumer Price Index (CPI), which measures the prices of goods and services purchased directly by consumers. WPI reflects factory gate prices before they reach the retail market, making it an important indicator of cost trends in production and trade.

The base year for the WPI is 2011–12, and the index covers three broad categories of commodities — primary articles, fuel and power, and manufactured products.

Price Movements in August 2025

According to the data, several categories within WPI showed significant price movements during August.

Prices of non-food articles rose by 2.92 percent compared to July. Minerals also registered an increase of 2.66 percent, while food articles recorded a rise of 1.45 percent. These segments were among the biggest contributors to the positive inflation print in August.

However, some segments recorded a decline. Prices of crude petroleum and natural gas fell by 0.43 percent, electricity declined by 2.91 percent, and mineral oils dropped by 0.07 percent compared to the previous month. The price of coal, on the other hand, remained unchanged from July levels.

This mix of rising and falling prices across categories highlights the varied dynamics that influenced the overall WPI movement in August.

Manufactured Products: Mixed Trends

Out of the 22 National Industrial Classification (NIC) two-digit groups that represent manufactured products, 13 groups registered an increase in prices in August compared to July. Five groups witnessed a decline, while four groups recorded no change in prices.

Manufactured food products, textiles, electrical equipment, transport equipment, and machinery showed month-over-month price increases. These sectors contributed to the positive movement in wholesale inflation.

In contrast, the manufacture of basic metals, computer, electronic and optical products, wearing apparel, wood and wood products, cork products, and furniture registered a decline in prices during August. These sectors acted as a counterbalance to the overall upward movement.

Key Drivers of Inflation

The government noted that the overall positive rate of inflation in August was primarily due to increases in food products, other manufacturing categories, non-food articles, non-metallic mineral products, and transport equipment. These drivers played a central role in pushing wholesale inflation into positive territory after two months of deflationary readings.

Monthly Movements in Context

The WPI trend over the past three months has shown significant volatility. In June 2025, the index dropped to -0.13 percent, marking a 20-month low. This was followed by a further decline to -0.58 percent in July, the lowest reading in two years. The August print at 0.52 percent therefore represents a turnaround and also the highest rate in four months.

This shift demonstrates how supply-side pressures in certain categories, particularly food and manufacturing, can quickly influence overall wholesale price trends.

Primary Articles: Gains in Food and Minerals

Within the primary articles segment, food and mineral prices increased notably in August. Food articles rose by 1.45 percent, while minerals climbed 2.66 percent. Non-food articles also rose by 2.92 percent. These increases in the primary articles category provided upward momentum to wholesale inflation.

At the same time, crude petroleum and natural gas recorded a decline of 0.43 percent. This drop, coupled with lower electricity prices, acted as a partial offset.

Fuel and Power: Decline Continues

The fuel and power segment continued to show weakness in August. Prices of electricity dropped 2.91 percent, while mineral oils slipped 0.07 percent. Crude petroleum and natural gas also fell, though coal prices remained unchanged from July levels.

This decline in energy-related categories prevented wholesale inflation from rising further in August.

Manufactured Products: Sector-Wise Breakdown

Manufactured products make up a large part of the WPI. Out of 22 NIC groups, 13 saw increases in August. Price rises were evident in food products, textiles, electrical equipment, other transport equipment, and machinery and equipment.

However, prices fell in basic metals, computer, electronic and optical products, wearing apparel, wood products, cork, and furniture. Four groups recorded no change. This mix indicates that while demand and supply factors boosted some sectors, others faced downward price pressures.

Inflation Outlook in Context

The August wholesale inflation data provides insights into price trends in the Indian economy at the factory gate level. The return to positive inflation after two months of deflation reflects changing dynamics in food and manufacturing segments.

According to the data, the strength in food articles and non-food articles, along with price increases in certain manufacturing groups, outweighed the declines in energy and select industrial products.

Related Developments

While the WPI shows wholesale inflation trends, broader projections for inflation in the country continue to be closely tracked. Crisil, in a separate assessment, projected headline inflation at 3.2 percent during 2025–26. This figure takes into account multiple factors, including wholesale and consumer inflation, as well as global commodity price movements.

Conclusion

India’s wholesale inflation moved back into positive territory in August 2025, coming in at 0.52 percent after two months of negative readings. The latest data highlights rising prices of food products, non-food articles, and select manufacturing categories as the primary drivers. At the same time, declines in crude petroleum, electricity, and mineral oils moderated the pace of increase.

With wholesale prices playing a crucial role in determining cost pressures in the economy, the August rebound signals renewed upward momentum. The detailed breakdown across primary articles, fuel and power, and manufactured products shows the sector-wise variations that shaped the final outcome.

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