India’s wholesale price inflation rose to an eight-month high of 0.83% (year-on-year) in December primarily due to a sequential uptick in the prices of food articles, non-food articles, minerals and manufactured products, the government data released on Wednesday showed. The Wholesale Price Index (WPI) based inflation reverted to positive after remaining in negative territory for two consecutive months, November (-0.32) and October (-1.02). In April 2025, the WPI inflation was 0.85%.
Sectoral Shift
According to the data, the deflation in food articles was 0.43% compared to 4.16% in November. The deflation in vegetables was 3.50% as against 20.23% in November. The food index (24.38% weight), consisting of ‘food articles’ from primary articles group and ‘food product’ from manufactured products group, has increased from 195.0 in November to 196.0 in December. The food index remained flat (Y-o-Y) in December.
Manufactured products, which carry the highest weight (64.23%) in the WPI basket, increased by 0.41% from 145.0 (provisional) for November to 145.6 (provisional) in December. It recorded an inflation rate of 1.82% on-year. The non-food articles category showed an inflation of 2.95% in December, against 2.27% in November. Fuel and power remained in negative territory at (-2.31)% in December against (-)2.27% in November.
“Positive rate of inflation in December is primarily due to increase in prices of other manufacturing, minerals, manufacture of machinery and equipment, manufacture of food products and textiles etc.,” the Ministry of Commerce and Industry said. The WPI inflation was 2.57% in December 2024.
Retail inflation inched up to a three-month high of 1.33% in December,largely on account of narrowing of food deflation and waning of a favourable base, according to the data released by the National Statistics Office on Monday.
Future Outlook
Economists expect WPI inflation to harden further in January and continue on an upward trajectory thereafter owing to an unfavourable base. In Q4 of FY26, the economists project WPI to revert to an inflation of around 1.5-2.0%, after witnessing a 0.2% deflation in Q3 FY2026, which will push up the growth in the GDP deflator in the quarter.
Madan Sabnavis, Chief Economist at Bank of Baroda, said less than 1% WPI inflation reflects both base effects and stable prices. “The inflation rate may be expected to cross 1% in coming months. Manufactured inflation reflects largely GST impact and will keep it sub 1% in months to come,” he said.
According to ICRA, core WPI (non-food manufactured items) inflation rose to a 34-month high of 2.0% in December from 1.5% in the previous month. “In sequential terms, the core index rose by 0.5% in December, the steepest uptick in 19 months, reflecting hardening global commodity prices and the depreciation in the USD/INR pair over the past few months, which is likely to have put pressure on the landed cost of imports,” Rahul Agrawal, Senior Economist, ICRA Ltd said, adding that January WPI inflation expected to rise to 1.5%.
Ranjeet Mehta, CEO & Secretary General, PHD Chamber of Commerce and Industry, stated that WPI inflation is expected to remain range-bound, supported by benign international crude oil prices, GST rate rationalisation, and healthy rabi crop production.