India’s Wholesale Inflation Drops to 13-Month Low at 0.85%, Food and Core Prices Ease

India's annual rate of inflation based on the Wholesale Price Index (WPI) cooled to a 13-month low of 0.85% in April, down from 2.05% a month ago, according to data released by the Ministry of Commerce and Industry on Wednesday. The Positive rate of inflation is primarily due to an increase in prices of the manufacture of food products, other manufacturing, chemicals and chemical products, manufacture of other transport equipment and manufacture of machinery and equipment, among others.

The month-over-month change in WPI for April stood at (-) 0.19% as compared to the previous month.

"The core (non-food manufacturing) WPI inflation print softened to 1.2% in April 2025 from 1.5% in March 2025, led by a favourable base. However, the pace of the sequential uptick in this index accelerated to 0.4% from 0.2% in the previous month, despite the softening in global commodity prices and the mild appreciation in the rupee," says Rahul Agrawal, senior economist at ICRA.

Food inflation, consisting of 'food articles' from the primary articles group and 'food product' from the manufactured products group, decreased from 4.66% in March to 2.55% in April.

"ICRA expects the WPI-food inflation to soften further in May 2025 (+7.8% in May 2024) from 2.5% in April 2025 (+6.1% in April 2024), aided by the favourable base as well as relatively favourable trends in wholesale prices of essential food items in the ongoing month so far," Agrawal notes.

The rating agency said that along with the softening in commodity and crude oil prices, is expected to augur well for the WPI print for May 2025. "We expect the same to ease slightly to 0.5-0.8% in the month (+2.7% in May 2024) from 0.9% in April 2025 (+1.2% in April 2024)," it adds.

ICRA further estimates the WPI to average sub 2% in FY2026, which, along with their CPI inflation and real GDP projections for the fiscal implies that nominal gross domestic product (GDP) growth may be capped at 9%.