Wholesale inflation eases to 2.05% in March on cheaper food items

Wholesale price inflation declined to a 6-month low of 2.05 per cent in March as prices of vegetables, potato and other food items eased, government data showed on Tuesday.

Photograph: Amit Dave/Reuters

Wholesale price index (WPI) based inflation was 2.38 per cent in February.

It was 0.26 per cent in March last year.

“Positive rate of inflation in March 2025 is primarily due to increasing prices of manufacture of food products, other manufacturing, food articles, electricity and manufacture of textiles etc,” the industry ministry said in a statement.

In September last year, WPI inflation was 1.91 per cent — lower than the 2.05 per cent recorded in March.

As per the WPI data, food inflation eased to 1.57 per cent in March from 3.38 per cent in February, with vegetables seeing a sharp drop.

Deflation in vegetables was 15.88 per cent during the month compared to 5.80 per cent in February.

Inflation in potato, which was rising in double digits since February 2024, fell in March 2025. Deflation in potato in March 2025 was 6.77 per cent.

In onion, inflation eased to 26.65 per cent in March against 48.05 per cent in February.

Manufactured products, however, saw a spike at 3.07 per cent in March compared to 2.86 per cent in February.

Fuel and power too saw an uptick with a 0.20 per cent rise in March against a deflation of 0.71 per cent in February.

India Ratings and Research Associate Director Paras Jasrai said the wholesale inflation averaged 2.3 per cent for FY25, higher than last year (-0.7 per cent), but significantly lower than 11.2 per cent in FY22-23.

“The positive spillover effect of low commodity prices would be felt through low wholesale inflation in the near term.

“Moreover, the satisfactory completion of rabi output would result in food inflation to be comfortable. On the whole, Ind-Ra expects the wholesale inflation to be in the vicinity of 1.5 per cent in the near term,” Jasrai said.

Bank of Baroda Economist Sonal Badhan said, “Going forward, as the trade war deepens further, global growth prospects remain weak.

“This will exert downward pressure on oil and other commodity prices, which, in turn, will be positive for WPI inflation.”

The RBI mainly takes into account retail inflation while formulating monetary policy.

Last week, the RBI cut the benchmark policy rate by 0.25 per cent to 6 per cent.

This is the second cut during the year to stimulate the economy facing the threat of US reciprocal tariffs.

The RBI sees retail inflation averaging 4 per cent in the current fiscal from the previous estimate of 4.2 per cent.