Key Takeaways
- India’s wholesale inflation has bottomed out but will likely stay negative through most of 2025-26
- Union Bank of India forecasts WPI below 0.35% and expects a 25 bps rate cut in December
- October 2025 WPI recorded a decline of 1.21% year-on-year
India’s wholesale price inflation has reached its lowest point and is expected to gain slight momentum from November, though it will likely remain in negative territory for most of 2025-26, according to a Union Bank of India report.
The bank’s current WPI forecast for 2025-26 tracks below 0.35%, driven by subdued global commodity prices and seasonal declines in food prices. The impact of flooding on food inflation has been contained, with supply chain disruptions failing to materialize as expected.
Rate Cut Expectations
With Union Bank’s retail inflation projections running sharply below RBI estimates, the report anticipates a 25 basis points repo rate cut during the upcoming December monetary policy review.
While real GDP growth remains robust, nominal GDP growth faces pressure from subdued inflation projections for both CPI and WPI in 2025-26.
October Inflation Data
Official data from the Ministry of Commerce and Industry showed India’s wholesale inflation turned negative in October 2025, with WPI recording a 1.21% decline compared to October 2024.
The price drop was primarily driven by decreased costs of food articles, crude petroleum, natural gas, electricity, mineral oils, and basic metals. Month-on-month, WPI declined by 0.06% compared to September 2025.
The RBI had maintained its benchmark repo rate at 6.5% for eleven consecutive periods before implementing its first rate cut in approximately five years during February 2025.
