Decline in Wholesale Inflation in the Country Potentially Reaches 2-Year Low to -0.45% According to UBI Report
India's Wholesale Price Index (WPI) is estimated to have declined to a near two-year low of -0.45 per cent year-on-year (y/y) in July, primarily due to significant declines in food prices and fuel costs, according to a recent report.
The food index fell by 2.15%, with primary food articles dropping 6.29%. Notable decreases were seen in vegetables (-28.9%), onions (-44.4%), potatoes (-41.3%), pulses (-15.12%), fruits (-2.65%), and eggs, meat, and fish (-1.09%). Fuel prices, including petrol and diesel, also declined by 2.43% y/y, with crude petroleum prices falling substantially from an inflation rate of 12.31% in June to -14.86% in July.
The decline in WPI has been a steady easing trend since March 2025, indicating a sustained disinflationary trend. Despite the overall decline, manufactured products saw a price increase of 2.05%, suggesting some core inflationary pressures remain.
The report noted that the decline in WPI was partly attributed to base effects. Core WPI, which excludes food and fuel, showed improvement, rising to 1.50 per cent in July. M/m inflation in milk, sugar, other manufactured food items, and eggs, fish and meat increased within the food category. Y/y inflation in pulses has been in the negative zone since February 2025.
Fuel inflation also stayed in the contraction zone, shrinking further to -4.90 per cent in July. The fall in WPI mirrors the trend in retail inflation (CPI). Cereals, pulses, fruits, spices, oils, and other food articles likely remained in deflation.
The report suggested that while inflationary pressures from global markets are possible, domestic conditions will play a crucial role in determining the wholesale inflation trend in the coming months. Monsoon patterns and potential weather-related disruptions remain key factors to watch, as they could impact the supply chain and influence WPI in the short term.
Global commodity prices may remain volatile due to uncertainties from additional US trade tariffs and ongoing geopolitical conflicts. However, weak demand and adequate supply could limit any sharp upward movement in prices.
The report was published on August 12, 2025. The decline in WPI is expected to gradually ease retail inflation as the cost savings permeate through the supply chain. This development is welcome news for consumers and businesses alike, as it signals a potential respite from inflationary pressures.
[1] India's Wholesale Price Index (WPI) falls to near two-year low in July 2025 [2] Wholesale inflation drops to 0.45% in July 2025 [3] India's wholesale inflation falls to 0.45% in July 2025 [4] Food inflation falls to 1-year low of -1.72% in July 2025 [5] Wholesale inflation in India: What the latest numbers tell us
- The significant decline in India's Wholesale Price Index (WPI) is reported to have reached a near two-year low of -0.45 per cent year-on-year (y/y) in July 2025, primarily due to a drop in food prices and fuel costs.
- In a recent report, India's wholesale inflation was estimated to have contracted to 0.45 per cent in July 2025, influenced by a fall in food prices and fuel prices.
- The latest data shows that India's wholesale inflation has declined to 0.45 per cent in July 2025, reflecting the drop in food prices and fuel costs.
- The food inflation index in India fell to a 1-year low of -1.72 per cent in July 2025, with notable decreases in several food categories like vegetables, onions, potatoes, pulses, fruits, and eggs, meat, and fish.
- In an analysis of India's wholesale inflation trends, the latest numbers indicate that deflationary pressure remains strong, particularly in food items such as cereals, pulses, fruits, spices, oils, and other food articles.
