Wholesale Inflation Falls to 13-Month Low of 0.85% in April Amid Cooling Prices

Decline in Food, Fuel, and Manufactured Product Prices Drives WPI Moderation​

New Delhi, May 14 — India’s wholesale price inflation (WPI) dropped sharply to a 13-month low of 0.85% in April 2025, driven by easing prices of food items, fuel, and manufactured products, according to data released by the Ministry of Commerce and Industry.

The WPI-based inflation was 2.05% in March 2025 and 1.19% in April 2024, marking a continued disinflationary trend. The last time WPI was lower than this was in March 2024, when it recorded 0.26%.

In a statement, the Ministry highlighted that the marginal positive inflation in April 2025 was largely attributed to price increases in segments such as manufactured food products, chemicals, machinery, and transport equipment.

Food Prices Witness Significant Deflation​

The data revealed a notable deflation of 0.86% in food articles during April, compared to an inflation of 1.57% in March. Among major components:

• Vegetables witnessed a deeper deflation of 18.26%, up from 15.88% in March.
• Onion inflation plummeted to 0.20%, from 26.65% in the previous month.
• Fruit inflation softened to 8.38%, down from 20.78%.
• Potatoes and pulses registered deflation at 24.30% and 5.57% respectively.

Analysts from Barclays noted that favourable base effects are expected to keep WPI inflation low in the coming months.

Fuel and Power See Deflation​

Fuel and power categories showed deflation of 2.18% in April, a significant turnaround from 0.20% inflation in March. The decline was attributed to falling prices of:

• Kerosene
• Aviation Turbine Fuel (ATF)
• Motor fuels

The dip in global crude oil prices, which remained in the USD 60–65 per barrel range, was influenced by OPEC+ decisions to raise production levels, applying downward pressure on prices.

Manufactured Products Inflation Eases​

Inflation in manufactured products moderated to 2.62% in April, compared to 3.07% in March. Despite the decline, segments like chemical products and transport equipment still showed price increases.

Outlook: Monsoon and RBI Policy in Focus​

Rahul Agrawal, Senior Economist at ICRA, commented that the Indian Meteorological Department’s forecast of an early and above-normal monsoon could boost crop output and keep food inflation under control. However, he cautioned that the distribution pattern of rainfall remains crucial.

Agrawal projected WPI to average below 2% in FY2026, and along with CPI and GDP trends, expects nominal GDP growth to remain capped at 9%.

Retail inflation (CPI), which is a key input for the Reserve Bank of India’s policy decisions, fell to a near 6-year low of 3.16% in April, as per data released earlier. With inflation easing across the board, there is growing room for the RBI to consider another rate cut in its upcoming June monetary policy review.

The RBI had previously cut the benchmark policy rate by 25 basis points to 6% in April, marking the second rate reduction this year to shield the economy from external pressures, including potential US retaliatory tariffs.

The central bank now expects retail inflation to average 4% in FY2026, down from its earlier projection of 4.2%.