Rama Krishna Sangem
Wholesale inflation has come down recently, with India’s wholesale price index (WPI) easing to (0.13\%\) in September 2025, a decrease from \(0.52\%\) in August. This moderation is largely due to softening prices for food and primary articles, which was offset by increases in other sectors like manufactured products.
This cooling is a continuation of a trend from earlier in the year, when wholesale inflation had previously turned negative in June 2025. This is largely attributed to good monsoon and surplus rains in most parts of the country. At the same time, critics say, this can also because of lower purchase power of people – when there is less demand for commodities, prices will automatically fall.
Recent figures: India’s wholesale inflation eased to \(0.13\%\) in September 2025, down from \(0.52\%\) in August. Causes: The slowdown is attributed to lower prices for food and primary articles.
Contrasting factors: While food and primary articles eased, rising prices in some manufacturing sectors, such as the manufacture of food products, continued to contribute to the overall WPI. Context: This follows a period of deflation, where India’s wholesale price index had turned negative in June 2025, marking a 25-month low at the time.
Inflation low since May
Continuing its downward trend, the consumer price inflation in India has hit an over six-year low in May, in respite to common people. According to the statistics ministry, the year-on-year inflation rate based on Consumer Price Index (CPI) for May was 2.82 per cent (provisional). It is the lowest year-on-year inflation since February 2019.
It was a decline of 34 basis points in the headline inflation of May in comparison to April 2025. The retail inflation rate is within the Reserve Bank of India’s (RBI) manageable range of 2-6 per cent.
Analysts expect inflation to remain under control, allowing the RBI to focus on supporting economic growth. The recent 50 basis points repo cut was quite an indication. The inflation outlook for the year 2025-26 has been revised downwards from RBI’s earlier forecast of 4 per cent to 3.7 per cent.
Even retail inflation too is low. Retail inflation last breached the Reserve Bank of India’s 6 per cent upper tolerance level in October 2024. Since then, it has been in the 2-6 per cent range, which the RBI considers manageable.
Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory well. The RBI held its benchmark repo rate steady at 6.5 per cent for the eleventh consecutive time, before cutting it first time in about five years in February 2025. This low inflation is expected to lead to lowering interest rates by the RBI
