Inflation measured by the Wholesale Price Index (WPI) dropped to -0.58 per cent in July from -0.13 per cent in June, data released by the Ministry of Commerce and Industry showed on Thursday. This marked the second straight month of negative rate of inflation. Per the data released by the Ministry of Commerce and Industry, this is primarily due to decrease in prices of food articles, mineral oils, crude petroleum & natural gas, manufacture of basic metals, etc. WPI-based inflation has been steadily easing since March and hit a 14-month low of 0.39 per cent in May.
The month over month change in WPI for the month of July 2025 stood at 0.39 per cent as compared to June 2025.
The month-over-month data released by the Ministry of Commerce and Industry showed that the index for primary articles increased by 1.18 per cent from 185.8 (provisional) for the month of June 2025 to 188.0 in July 2025. The price of crude petroleum & natural gas (2.56 per cent), non-food articles (2.11 per cent) and food articles (0.96 per cent) increased in July 2025 as compared to June. The price of minerals (-1.08 per cent), however, decreased in July as against June.
The index for Fuel & Power increased by 1.12 per cent from 143.0 (provisional) for the month of June 2025 to 144.6 (provisional) in July 2025. The manufactured products index declined by 0.14 per cent to 144.6 (provisional) in July from 144.8 for the month of June.
Furthermore, per the release by the Ministry of Commerce & Industry, inflation for food articles came in at -6.29 per cent in July as compared to -3.75 per cent in June. The inflation rate for primary articles went down to -4.95 per cent from -3.38 per cent in the previous month. The fuel and power inflation was at -2.43 per cent in July as compared to -2.65 per cent in June. And manufactured products inflation stood at 2.05 per cent in July.
Under the food articles category, vegetable inflation dropped to -28.96 per cent in July from -22.65 per cent in June. Pulses inflation during the month of July came in at -15.12 per cent while the inflation for wheat stood at 4.40 per cent during the month in review. Eggs, Meat & Fish inflation stood at -1.09 per cent in July from -0.29 per cent in June. Potato and onion reported inflation at -41.26 per cent and -44.38 per cent respectively.
The non-food articles reported WPI inflation at 3.40 per cent in July as against 2.29 per cent in June. Minerals inflation went up to 1.06 per cent in July from 0.83 per cent in June. The Crude Petroleum & Natural gas posted wholesale inflation at -11.15 per cent in July and crude petroleum was at -14.86 per cent.
What does this mean?
Reacting on this, Rahul Agrawal, Senior Economist, ICRA, said, “The year-on-year (YoY) deflation in the WPI expectedly widened to 0.6 per cent in July 2025 from 0.1 per cent in June 2025, printing largely in line with ICRA’s expectation (-0.4 per cent). This was largely driven by the food segment, which witnessed a larger YoY contraction to the tune of 2.1 per cent as against 0.3 per cent in the previous month, led by vegetables, pulses, and eggs, meat & fish.”
Looking ahead, ICRA projected the headline WPI to re-enter the inflationary territory in August 2025 after a gap of two months, amid the hardening in YoY prints for food and crude oil so far, depreciation in the USD/INR pair, as well as an unfavourable base.
“Besides, heavy rains could push up perishable prices sharply in the second half of August, and remain a key monitorable. Additionally, we expect the WPI inflation to average at 1 per cent in FY26, which along with the CPI inflation forecast of 3.0-3.2 per cent, implies that nominal GDP growth is likely to be limited to 8 per cent in the fiscal, as against 9.8 per cent in FY25,” he added.