Wholesale Price Inflation Hits 27-Month Low Amid Deflationary Trends

In October 2025, wholesale price inflation dropped to a 27-month low of -1.21%, driven by falling food and fuel prices. Government data highlights deflation in key food items like vegetables and pulses. With retail inflation also dipping, there's potential pressure on the RBI to lower interest rates.

In a sign of easing inflationary pressures, wholesale price inflation dipped to a 27-month low of -1.21% in October, as revealed by government data on Friday. The decline was primarily fueled by a significant drop in the prices of food items such as pulses and vegetables, as well as a reduction in fuel and manufactured product prices.

The Wholesale Price Index (WPI)-based inflation, which was 0.13% in September and 2.75% in October of the previous year, is now largely being influenced by decreased costs in food articles, crude petroleum, electricity, and basic metals, according to the industry ministry. The data showed a notable deflation of 8.31% in food articles, with vegetables and pulses witnessing a sharp price drop.

Retail inflation mirrored this trend, reaching an unprecedented low of 0.25% in October, propelled by recent GST rate cuts. As a result, pressure mounts on the Reserve Bank of India to potentially lower interest rates in its upcoming monetary policy meeting, despite some economic analysts, like Paras Jasrai from India Ratings and Research, questioning the necessity of such a move considering India's current economic growth outlook.