Sharp declines in food and fuel prices pull wholesale inflation below zero
India’s wholesale price index (WPI) inflation dropped to (-)1.21 per cent in October, reversing from 0.13 per cent in September, as prices of key food items, particularly pulses and vegetables, continued to ease. Cheaper fuel and manufactured goods also contributed to the slide, according to data released by the government on Friday.
WPI inflation had stood at 2.75 per cent in the same month a year ago.
“The negative rate of inflation in October 2025, is primarily due to a decrease in prices of food articles, crude petroleum & natural gas, electricity, mineral oils and manufacture of basic metals etc,” the industry ministry said in a release.
Food inflation entered deeper deflation territory, with WPI food prices falling 8.31 per cent in October compared with a 5.22 per cent drop in September. Prices of onions, potatoes, vegetables and pulses recorded significant declines. Deflation in vegetables widened to 34.97 per cent, from 24.41 per cent a month earlier. Pulses saw deflation of 16.50 per cent, while potatoes and onions registered declines of 39.88 per cent and 65.43 per cent, respectively.
Manufactured products inflation eased to 1.54 per cent in October, down from 2.33 per cent in September. The fuel and power category continued to remain in deflation, at 2.55 per cent versus 2.58 per cent a month ago.
The decline in wholesale inflation aligns with expectations after GST rates were reduced with effect from September 22. As part of the rate rationalisation exercise, the earlier four-tier GST structure was brought down to two slabs—5 per cent and 18 per cent—leading to lower prices for several mass-consumption items.
The GST-driven price corrections, along with a favourable base from last year, have helped pull down both wholesale and retail inflation metrics. Retail inflation for October had fallen to a record low of 0.25 per cent, aided by the GST cuts and a high base, compared with 1.44 per cent in September.
The Reserve Bank of India (RBI), which tracks retail inflation for policy decisions, kept the repo rate unchanged at 5.5 per cent in its previous review.
With both CPI and WPI softening sharply, pressure is expected to build on the central bank to consider a rate cut in its next monetary policy meeting scheduled for December 3–5.
