New Delhi, India – India’s wholesale price index (WPI)-based inflation eased to a 13-month low of 0.85% in April 2025, down significantly from 2.05% in March, driven by a sharp decline in food and fuel prices, according to data released by the Ministry of Commerce and Industry on Wednesday. This marks the lowest WPI inflation since March 2024, when it stood at 0.26%, signaling a cooling of price pressures in the economy.
Key Insight: The drop to 0.85% was lower than economists’ expectations of 1.76%, reflecting a broader moderation in inflationary pressures, particularly in food and fuel sectors.
Food and Fuel Prices Lead the Decline
The WPI Food Index, which includes food articles and food products, saw its annual inflation rate fall to 2.55% in April from 4.66% in March. Notably, vegetable prices contracted by 18.26% year-on-year, providing significant relief to households. Fuel and power prices also saw a deflation of 2.18% in April, compared to a marginal inflation of 0.20% in March, driven by lower energy costs in the wholesale market.
“The easing food inflation is expected to bring relief to households and boost consumption demand as the new financial year begins,” said Shiva Rajora, an economic analyst based in New Delhi.
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Manufactured Products Show Mixed Trends
While food and fuel prices softened, inflation in manufactured products remained relatively stable at 2.62% in April, down slightly from 3.07% in March. The Ministry of Commerce and Industry noted that the positive inflation rate in April was primarily due to price increases in food products, chemicals, transport equipment, and machinery. Paras Jasrai, Associate Director at India Ratings and Research, highlighted that the decline in manufactured products was broad-based, with core inflation also moderating after six consecutive months of increases.
Retail Inflation Complements the Trend
The wholesale inflation data comes on the heels of a report showing retail inflation, measured by the Consumer Price Index (CPI), dropping to a 69-month low of 3.16% in April 2025, down from 3.34% in March. This was driven by a double-digit fall in vegetable prices and a significant decline in pulses prices, marking the lowest retail inflation since July 2019. The Reserve Bank of India (RBI) has noted that retail inflation is expected to average 4% for the fiscal year 2025-26, down from its earlier estimate of 4.2%, creating room for potential rate cuts.
Economic Impact: With both wholesale and retail inflation below the RBI’s 4% target, economists anticipate further monetary easing, potentially including two 25-basis-point rate cuts by the end of 2025, to stimulate economic growth.
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Outlook for the Economy
The significant drop in wholesale inflation is seen as a positive indicator of robust economic growth. Experts predict that inflation could decline further in the coming months, supported by favorable monsoon forecasts and stable global commodity prices. The RBI’s Monetary Policy Committee, in its April meeting, expressed optimism about moderating inflation, projecting a decline to 4% for FY26, which could provide further relief to Indian households.
“The WPI data being at a 13-month low is a strong signal of economic stability,” said an industry spokesperson. “Coupled with the decline in retail inflation, this creates an environment conducive to increased consumer spending and investment.”
As India navigates global economic challenges, including potential tariff-related price pressures, the current softening of inflation provides a window of opportunity for policymakers to bolster growth. The Interview Times will continue to monitor these developments and their impact on Indian consumers and businesses.