India’s Wholesale Inflation Trends: On the Verge of a Major Shift

India's Wholesale Price Index (WPI) suggests bottomed-out inflation, set to gain momentum despite staying negative for most of 2025-26. Union Bank foresees a repo rate cut due to low CPI projections, with October witnessing a notable decline in WPI. Despite challenges, India remains on a favorable inflation trajectory.

India's Wholesale Price Index (WPI), which depicts wholesale inflation trends, has hit its lowest point but is expected to gain traction from November despite lingering in negative figures throughout much of 2025-26, according to a Union Bank of India report. Currently, the bank predicts the WPI will remain below 0.35 percent, influenced by lower global commodity prices and seasonal food price declines, with flood impacts on food inflation largely controlled.

Food WPI has been suppressed, with anticipated disruptions in supply chains and flooding impacts failing to emerge as feared, thereby keeping food prices in check, according to the report. Furthermore, Union Bank's CPI or retail inflation forecasts are considerably under the Reserve Bank of India's (RBI) recent estimates. This has led to expectations of a 25 basis points cut in the repo rate at the upcoming monetary policy review in December.

Despite robust real GDP growth, the report suggests nominal GDP could experience pressure following subdued 2025-26 CPI and WPI projections. As reported by the Ministry of Commerce and Industry, India's WPI turned negative in October, declining by 1.21% compared to October 2024. Price reductions in food articles, crude petroleum, natural gas, electricity, mineral oils, and basic metals primarily drove this slump. A monthly WPI change of -0.06% was recorded from September to October 2025. The Indian government releases the WPI figures monthly, based on comprehensive data from institutional and manufacturing sources. India has successfully navigated its inflation route amid global inflation challenges, marked by an anticipated repo rate cut following an eleven-straight session halt at 6.5% by the RBI before February 2025's reduction.

(With inputs from agencies.)