India's Wholesale Inflation Falls to 0.85% in April, Largely Driven by Cheaper Food and Fuel

India's Wholesale Price Index (WPI) inflation dipped to 0.85% in April, down from 2.05% in March, based on government statistics. The decrease was largely triggered by cheaper food and fuel prices, while manufacturing inflation was constant at 2.62% year-on-year2.

Aggregate WPI Inflation:

April WPI inflation was 0.85%, considerably less than the Reuters poll estimate of 1.76%.
The fall came largely because of decreasing food and fuel prices, even though manufacturing inflation remained steady.

Food Price Index:

Wholesale Price Food Index increased by 2.55% year-on-year, marking moderate increases in basic commodities.
Decreasing vegetable and cereal prices were the reasons behind the easing of food inflation.

Fuel Price Index:

The Fuel Price Index decreased by -2.18% on a year-on-year basis, reflecting sustained deflation in energy prices.
Reduced international crude oil prices and government actions to regulate fuel prices contributed to the decline.

Manufacturing Inflation:

Manufacturing inflation was constant at 2.62%, reflecting steady industry production expenses.
Increased input costs in electronics and textiles neutralized decreases in metal and chemical costs.

February WPI Revision

The WPI inflation in February was revised to 2.45%, based on fresh price patterns in major articles.

Insight:

Indian wholesale inflation is easing further due to reduced food and fuel prices, while manufacturing inflation stabilizes. Industrial growth will be boosted by lower fuel prices, while consumer affordability is guaranteed by moderate food inflation. The Reserve Bank of India (RBI) expects inflation to be below 4% for FY26, giving a boost to economic stability.

Sources: Business Standard, Economic Times