Wholesale inflation dropped to a 27-month low of (-) 1.21 per cent in October, driven by steep deflation in food items such as pulses, vegetables and key perishables, alongside softer fuel and manufacturing prices, according to government data released on Friday.
Wholesale Price Index (WPI)-based inflation had stood at 0.13 per cent in September and 2.75 per cent in October 2024.
“The negative rate of inflation in October 2025, is primarily due to 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 statement.
Food articles saw deepening deflation at 8.31 per cent in October compared with 5.22 per cent a month earlier, with a pronounced fall in the prices of onion, potato, vegetables and pulses. Vegetable deflation widened to 34.97 per cent in October from 24.41 per cent in September. Pulses recorded a deflation of 16.50 per cent, while potato and onion prices fell by 39.88 per cent and 65.43 per cent respectively.
Manufactured products saw inflation ease to 1.54 per cent from 2.33 per cent in September. Fuel and power registered deflation of 2.55 per cent, marking a decline for the seventh straight month, compared with 2.58 per cent in September.
Paras Jasrai, Associate Director at India Ratings and Research, said the trend of negative wholesale inflation was likely to continue. “Looking ahead, a favourable base effect in the rest of FY26 is expected to keep the wholesale index into deflation. Consequently, Ind-Ra anticipates wholesale deflation in November 2025 to be under 1 per cent,” he said.
Also read: WPI inflation eases marginally to 0.13 pc in September
The decline in WPI inflation follows the GST rate cuts implemented from September 22. GST on several widely used mass-consumption goods was reduced as part of a simplification exercise that collapsed the earlier four-tier tax structure into two slabs of 5 and 18 per cent.
The tax cuts, combined with a favourable base, have also helped pull down retail inflation. Data released last week showed consumer inflation at a record low of 0.25 per cent in October, down from 1.44 per cent in September.
The Reserve Bank of India, which tracks retail inflation for monetary policy decisions, kept the benchmark repo rate unchanged at 5.5 per cent last month. With both retail and wholesale inflation falling sharply, pressure is mounting on the central bank to cut rates at its December 3-5 policy meeting.
Jasrai, however, said the case for monetary easing was not clear-cut. He noted that FY26 retail inflation was expected to trend near 2.5 per cent. “However, to prevent the economy going deep in sluggish and weak economic growth, the RBI may go for a 25-50 bp cut in repo rate in its December 2025 monetary policy,” he added.
Ranjeet Mehta, CEO and Secretary General of PHDCCI, said wholesale inflation would likely remain contained due to benign global crude prices, adequate buffer foodgrain stocks and a healthy kharif harvest.
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