WPI inflation eases to 0.85% in April on softening food, fuel prices

India’s wholesale price inflation cooled to 0.85% in April 2025, down sharply from 2.05% in March, as prices of food articles, manufactured products, and fuel registered a notable decline, according to data released by the Ministry of Commerce and Industry on Wednesday. The Wholesale Price Index (WPI)- based inflation stood at 1.19% in April 2024. The latest moderation marks a continued softening trend in input costs, which could support corporate margins and offer greater flexibility for monetary policy easing.
According to official data the positive rate of inflation in April 2025 was primarily driven by a rise in prices in select manufacturing segments, including food products, chemicals and chemical products, machinery and equipment, and transport equipment. However, the broader trend reflected a decline in key commodity categories. Food articles recorded a deflation of 0.86% in April, a sharp reversal from the 1.57% inflation reported in March. Vegetables led the deflationary trend, with prices falling 18.26% in April, compared to a decline of 15.88% the previous month. Notably, onion inflation eased drastically to 0.20% from a high of 26.65% in March, contributing significantly to the overall softening in food prices.
Inflation in manufactured products slowed to 2.62% in April from 3.07% in March, reflecting easing cost pressures across industrial inputs. Meanwhile, the fuel and power category entered deflationary territory, registering a decline of 2.18% in April compared to a marginal deflation of 0.20% in March. The latest WPI figures follow the Consumer Price Index (CPI) data released on Tuesday, which showed retail inflation cooling to 3.16% in April—the lowest since July 2019—largely due to subdued prices of vegetables, fruits, pulses, and protein-rich items.
The easing in both retail and wholesale inflation is expected to strengthen the Reserve Bank of India’s (RBI) case for further rate cuts. In April, the RBI reduced the benchmark repo rate by 25 basis points to 6%, marking the second cut of the year in an effort to stimulate domestic demand amid external uncertainties, including the threat of reciprocal tariffs by the United States. The RBI has also revised its retail inflation forecast for FY25 to 4% from its earlier estimate of 4.2%, suggesting that inflationary pressures remain contained within the central bank’s comfort zone.With inflation trends continuing to soften across both wholesale and retail levels, economists anticipate that the RBI may consider another rate reduction in its June policy review to bolster economic momentum.

(Business Correspondent)