November 14th 2025.
New Delhi: On Friday, government data showed that Wholesale Price Inflation had dropped to a 27-month low of 1.21% in October. This decline was led by a significant decrease in food prices, particularly for items like pulses and vegetables. Lower prices for fuel and manufactured goods also contributed to the overall decrease in WPI-based inflation. This is a notable change from the previous month, when WPI was at 0.13%, and from October of last year, when it was at 2.75%.
According to a statement from the industry ministry, the negative inflation rate in October 2025 was mainly due to the decrease in prices of food items, crude petroleum, natural gas, electricity, mineral oils, and basic metals. The WPI data also showed a deflation of 8.31% in food articles in October, compared to 5.22% in September. This was largely driven by a decline in the prices of onions, potatoes, vegetables, and pulses.
The month of October saw a significant decrease in the prices of vegetables, with a deflation rate of 34.97%, up from 24.41% in September. Pulses also saw a deflation rate of 16.50% in October, while potatoes and onions had deflation rates of 39.88% and 65.43%, respectively. The inflation rate for manufactured products also decreased, dropping to 1.54% from 2.33% in September. Additionally, fuel and power saw a negative inflation rate of 2.55%, marking seven consecutive months of decline.
Economists predict that the Reserve Bank of India will make another repo rate cut in the upcoming Monetary Policy Committee review, as inflation continues to ease. This is in line with expectations, as the rates of Goods and Services Tax were reduced in September, leading to lower prices for goods. This, combined with a favorable inflation base from last year, has resulted in decreases in both retail and wholesale inflation.
The data released last week showed that retail inflation had reached an all-time low of 0.25% in October, driven by GST rate cuts and a high inflation base from last year. This was significantly lower than the 1.44% recorded in September. The Reserve Bank of India, which takes into account retail inflation, did not change the benchmark policy rates last month, but with the decline in both retail and WPI inflation, there may be pressure to cut rates at the next monetary policy review meeting in December.
However, some experts warn that the rationale for monetary easing may not be strong, given the current trend of India's economic growth. It is expected that retail inflation for FY26 will be around 2.5%. Despite this, the RBI may still opt for a 25-50 basis point cut in the repo rate to prevent the economy from slowing down. The PHDCCI also expects WPI inflation to remain stable due to favorable international crude oil prices, ample food-grain stocks, and a healthy kharif harvest.
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