Wholesale deflation at 1.21% in October vs 0.13% inflation in Sept

WPI Data October 2025: Wholesale price inflation (WPI) declined to minus 1.21 per cent in October, led by a sharp fall in prices of food articles, fuel and key manufactured products, according to government data released on Friday. WPI inflation stood at 0.13 per cent in September and 2.75 per cent in October last year.

The Industry Ministry said the negative wholesale inflation rate was “primarily due to decrease in prices of food articles, crude petroleum and natural gas, electricity, mineral oils and manufacture of basic metals”.

Food inflation declines sharply

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Deflation in food articles widened to 8.31 per cent in October from 5.22 per cent in September. Prices of onion, potato, pulses and vegetables saw significant declines.

Vegetable prices recorded deflation of 34.97 per cent, compared with 24.41 per cent a month earlier. Pulses saw deflation of 16.50 per cent, while potato and onion prices fell 39.88 per cent and 65.43 per cent respectively.

Manufactured items and fuel remain weak

Inflation in manufactured products eased to 1.54 per cent in October from 2.33 per cent in September.
Fuel and power continued to show deflation at 2.55 per cent, nearly unchanged from 2.58 per cent in September.

Impact of GST rate cuts

The fall in wholesale inflation is broadly in line with expectations following cuts in Goods and Services Tax (GST) rates effective September 22.

GST on several mass-consumption items was lowered as part of a rationalisation move that reduced the earlier four-tier structure to two slabs of 5 per cent and 18 per cent.

These tax cuts, along with a favourable base effect, have eased both wholesale and retail inflation.

Retail inflation at record low

Retail inflation dropped to an all-time low of 0.25 per cent in October, data released last week showed. This was largely due to GST rate reductions and a high base from the previous year. Retail inflation in September was 1.44 per cent.

Monetary policy outlook

The subdued inflation environment increases expectations of monetary easing. The Reserve Bank of India (RBI), which tracks retail inflation for policy decisions, kept benchmark rates unchanged at 5.5 per cent last month.

With both WPI and CPI showing sharp declines, analysts expect the central bank to face greater pressure to cut interest rates at the next monetary policy review meeting scheduled for December 3–5.