Low Wholesale Inflation in India Opens Space for Growth-Supportive Policy

Overview

India's wholesale inflation has remained under sustained downward pressure through mid-2025, creating a favourable macroeconomic environment. According to the latest Wholesale Price Index (WPI) data, overall wholesale inflation turned negative at -0.32% year-on-year in November 2025, highlighting easing cost pressures across key sectors of the economy.

The decline in wholesale inflation is driven mainly by sharp deflation in Primary Articles and Fuel & Power, while Manufactured Products inflation remained positive but subdued. This trend provides relief to producers and offers policymakers greater flexibility to maintain a growth-supportive stance.

Wholesale Inflation Trends in India

India’s WPI inflation trajectory clearly reflects improving supply dynamics and softer global commodity prices. After moderating steadily over the past few months, wholesale inflation slipped into negative territory in October and extended its decline in November 2025.

The persistent softness in WPI suggests that cost-push inflation risks are well contained, easing pressure on businesses and supporting economic stability.

Primary Articles Lead the Decline

The biggest drag on wholesale inflation came from Primary Articles, which witnessed steep deflation during the period. Prices of key food items such as vegetables, pulses, onions, and potatoes declined sharply.

This correction was driven by:

• Improved agricultural supply
  
  
• Seasonal arrivals of crops
  
  
• Easing food shortages
  
  
• Better distribution dynamics
  
  

As food items carry significant weight in the WPI basket, the sharp fall in primary article prices played a decisive role in pulling overall wholesale inflation lower.

Fuel and Power Remain in Deflation

Fuel & Power inflation also stayed firmly in negative territory, reinforcing the disinflationary trend. Lower global crude oil prices, soft international energy markets, and stable coal prices contributed to reduced fuel costs.

The sustained decline in fuel inflation helped lower transportation and production costs, providing indirect relief across multiple sectors of the economy.

Manufactured Products Show Muted Inflation

In contrast to food and fuel, Manufactured Products inflation remained positive but moderated. This indicates limited pricing power for manufacturers amid:

• Soft domestic demand
  
  
• Falling input costs, particularly metals
  
  
• Competitive market conditions
  
  

While manufactured inflation provided mild support to the WPI, it was not strong enough to offset the deflation in primary articles and fuel.

Impact on Corporate Margins

The prolonged phase of low wholesale inflation signals benign cost pressures for producers. Lower raw material and energy costs are likely to:

• Support operating margins
  
  
• Improve cost efficiency
  
  
• Reduce input-related risks
  
  

This environment is particularly favourable for manufacturing and commodity-linked sectors.

Policy Implications and Economic Outlook

From a policy perspective, subdued wholesale inflation gives policymakers room to remain growth-supportive. With inflation risks well under control at the wholesale level, the focus can stay on supporting economic activity without immediate concerns of cost-push inflation.

The current inflation dynamics strengthen the case for accommodative policy measures to sustain growth momentum.

Takeaway

India’s wholesale inflation remains comfortably low, driven by sharp deflation in food and fuel prices and muted pricing power in manufacturing. The negative WPI print underscores easing cost pressures, supports corporate margins, and provides policymakers with flexibility to prioritise growth as inflation risks stay contained.