WPI Inflation Hits 27-Month Low as Food, Fuel Prices Cool
India’s wholesale price index (WPI) inflation dropped to -1.21% in October 2025, marking its lowest level in 27 months. The decline was driven by significant deflation in food articles, fuel, and manufactured goods, according to official data released on Friday.
Key Takeaways
- WPI inflation turned negative at -1.21%, down from 0.13% in September
- Food articles deflation deepened to 8.31%, with vegetables and pulses leading the decline
- Manufactured products inflation eased to 1.54%, while fuel prices continued their deflationary trend
- Analysts expect WPI to remain in deflation territory through November
Sector-Wise Price Movements
The industry ministry attributed the negative inflation primarily to falling prices of food articles, crude petroleum, natural gas, electricity, and basic metal manufacturing.
Food deflation intensified to 8.31% in October from 5.22% in September. Vegetable prices saw the sharpest decline with deflation hitting 34.97%, while pulses recorded 16.50% deflation. Potatoes and onions registered dramatic price drops of 39.88% and 65.43% respectively.
In manufactured products, inflation moderated to 1.54% from 2.33% the previous month. Fuel and power continued their deflationary run for the seventh consecutive month at -2.55%.
GST Impact and Base Effect
The WPI decline aligns with expectations following GST rate reductions implemented on September 22. The tax rationalization simplified the structure to two main slabs of 5% and 18%, particularly benefiting mass-consumption items.
These tax cuts, combined with favorable base effects from the previous year, have contributed to pulling down both wholesale and retail inflation.
RBI Policy Implications
The simultaneous decline in both WPI and retail inflation (which hit a record low of 0.25% in October) is increasing pressure on the Reserve Bank of India to consider interest rate cuts in its upcoming December 3-5 monetary policy review.
However, Paras Jasrai of India Ratings and Research cautioned that “based on current economic growth trends, the case for monetary easing is not very strong.” Despite this, he suggested the RBI might still opt for a 25-50 basis point repo rate cut to prevent sluggish economic growth.
PHDCCI’s Ranjeet Mehta expects WPI inflation to remain range-bound, supported by benign crude oil prices, adequate food-grain buffer stocks, and a healthy kharif harvest.
