Wholesale price inflation eases to 0.13% in Sep on lower food prices

Wholesale price inflation (WPI) softened to 0.13 per cent in September on easing in prices of food articles and manufactured items, government data showed on Tuesday.

Photograph: Danish Siddiqui/Reuters

WPI-based inflation was 0.52 per cent in August and 1.91 per cent in September last year.

“Positive rate of inflation in September 2025 is primarily due to an increase in prices of the manufacture of food products, other manufacturing, non-food articles, other transport equipment and textiles, etc,” the industry ministry said in a statement.

According to WPI data, deflation in food articles was 5.22 per cent in September, compared to 3.06 per cent in August, with vegetables experiencing a decline in prices.

Deflation in vegetables was 24.41 per cent in September, as against 14.18 per cent in August.

In the case of manufactured products, inflation eased to 2.33 per cent, as against 2.55 per cent in August.

Fuel and power witnessed a negative inflation or deflation of 2.58 per cent in September, as against 3.17 per cent in the previous month.

Barclays India Chief Economist Aastha Gudwani said that amid generally lower global commodity prices, WPI inflation is expected to stay subdued for longer.

India Ratings and Research, Associate Director, Paras Jasrai, said core inflation rose to a 31-month high of 1.9 per cent in September 2025, driven by a record pace of jewellery price growth at 34.1 per cent year-over-year.

“Wholesale inflation was flat at 0.02 per cent in the second quarter of FY’26, reaching an eight-quarter low.

This, along with record-low retail inflation, is expected to result in muted GDP deflator growth and will put pressure on corporate margins in 2QFY26.

Looking ahead, a favorable base effect is expected to push the wholesale index back into deflation in October 2025.

Consequently, Ind-Ra anticipates wholesale deflation in October 2025 to be around 0.5 per cent, Jasrai said.

“The near-term inflation trajectory is expected to remain weak, with some pickup anticipated by the end of FY26.

“There is potential for another round of 25 basis point cuts in the repo rate, though much will depend on incremental data, including the impact of effective GST rates,” he added.

PHDCCI, CEO & Secretary General, Ranjeet Mehta, said the low overall inflation in September was primarily driven by fall in food and primary article prices.

He added that the moderation in wholesale prices was mainly due to lower food and energy costs, a strong agricultural output, and stable commodity prices globally.

Improved supply-side conditions following a good monsoon, along with government interventions to control retail prices of essential commodities, also contributed to the decline.

“Looking ahead, wholesale inflation is expected to remain benign in the coming months, supported by adequate food supply, stable global commodity prices, and government measures to control inflation in key sectors.

“The harvest of kharif crops and the expected arrival of rabi produce in the next quarter are likely to keep food inflation contained,” Mehta said.

The Reserve Bank of India (RBI), which takes into account retail inflation, had kept benchmark policy rates unchanged at 5.5 per cent earlier this month.

Retail inflation fell to an 8-year low of 1.5 per cent in September, official data released on Monday showed.