India’s WPI Inflation Turns Negative Amid Broad-Based Price Decline

New Delhi, July 14 — India’s wholesale price inflation (WPI) slipped into the negative zone for the first time in 2025, registering a deflation of –0.13% in June, according to data released by the Ministry of Commerce and Industry. The decline was driven by falling prices across key sectors, including food articles, fuel, and select manufactured goods.

The WPI had stood at 0.39% in May and 3.43% in June 2024, marking a significant year-on-year drop. Food articles saw a deflation of 3.75%, with vegetables alone plunging by 22.65%, reflecting seasonal supply surges and easing input costs. Fuel and power prices also declined by 2.65%, led by a sharp 9.10% drop in electricity tariffs, while mineral oils and coal registered marginal decreases.

Manufactured products, which constitute the largest share of the WPI basket, recorded a modest inflation rate of 1.97%, down from 2.04% in May. Within this category, basic metals, food products, and rubber and plastics experienced price reductions, while pharmaceuticals, machinery, and electronics saw slight increases.

The Reserve Bank of India (RBI), which primarily tracks retail inflation for monetary policy decisions, recently revised its inflation outlook for FY 2025–26 from 4% to 3.7%. In response to the easing inflationary trend, the RBI cut the benchmark repo rate by 50 basis points to 5.5% and announced a phased 100 basis point reduction in the Cash Reserve Ratio (CRR), aimed at injecting ₹2.5 lakh crore into the banking system to boost liquidity and credit flow.

Economists view the WPI deflation as a sign of broad-based moderation in price pressures, offering the central bank greater flexibility to pursue growth-oriented policies. However, they caution that geopolitical uncertainties and monsoon variability could influence inflation dynamics in the coming months.