India’s wholesale inflation, measured by the Wholesale Price Index (WPI), declined to (-)1.21% in October 2025, marking its lowest level in over two years. The drop was attributed to a combination of factors, including reduced Goods and Services Tax (GST) rates, a favourable base effect, and deflation in key commodity groups.
The Ministry of Commerce and Industry reported that the decline was led by falling prices in food articles, fuel, and manufactured goods. Notably, vegetable prices saw a sharp drop, with onions and potatoes registering significant deflation. The WPI for food articles fell by over 8%, while fuel and power categories also showed a downward trend.
The GST rate rationalization implemented earlier this year helped ease input costs for producers, contributing to the softening of wholesale prices. Additionally, the base effect from October 2024, when WPI inflation stood at 2.75%, amplified the year-on-year decline.
This marks the seventh consecutive month of negative WPI inflation, reflecting subdued demand and easing supply-side pressures. Economists suggest that while this trend may offer short-term relief to manufacturers, it also signals caution for broader economic momentum.
The Reserve Bank of India (RBI), which primarily tracks Consumer Price Index (CPI) inflation for policy decisions, is expected to monitor these developments closely as it prepares for its next monetary review.
