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India’s Wholesale Inflation Turns Negative in June, Fuel and Food Prices Drag Index Below Forecast

Updated: July 14, 2025 12:06

Image Source: The Hindu
India’s Wholesale Price Index (WPI) inflation slipped into negative territory in June 2025, registering -0.13 percent year-on-year, sharply below the Reuters poll estimate of 0.52 percent. The decline was primarily driven by falling fuel and food prices, even as manufacturing inflation remained elevated.
 
Key Highlights:
  • Headline WPI inflation for June stood at -0.13 percent, compared to 0.85 percent in April (revised).
  • Fuel price index contracted by 2.65 percent YoY, reflecting lower global crude prices and domestic fuel adjustments.
  • Food index declined 0.26 percent YoY, led by softening prices in cereals, pulses, and edible oils.
  • Manufacturing inflation remained firm at 1.97 percent YoY, indicating persistent input cost pressures in industrial goods.
Sectoral Breakdown and Implications:
  • The negative WPI print suggests easing wholesale price pressures, which could support RBI’s stance on maintaining repo rates amid stable retail inflation.
  • Lower fuel inflation is expected to reduce logistics costs, benefiting core sectors like FMCG, cement, and auto.
  • The decline in food prices may offer relief to consumers but could impact farm incomes if the trend persists.
  • Manufacturing inflation above 1.5 percent signals continued cost pass-through from producers to retailers, keeping CPI risks alive.
Outlook:
  • Economists expect WPI to remain subdued in Q2 FY26, barring supply shocks or monsoon disruptions.
  • The divergence between WPI and CPI trends will be closely watched for monetary policy cues.
Sources: Reuters, Business Standard, Economic Times, Livemint, Ministry of Commerce & Industry (July 2025)

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