Wholesale price inflation drops to 13 -month low of 0.85% in April

Business Standard

14-05-2025

India's wholesale price index (WPI)-based inflation dipped to a 13-month low of 0.85 per cent in April from 2.05 per cent in March, driven by a decline in food and fuel and power prices.
The price rise also decelerated in the manufactured products category during the month, which has a weight of 64.2 per cent in the index, data released by the Ministry of Commerce and Industry on Wednesday showed.
Data showed that the prices of primary food articles (-0.86 per cent) witnessed deflation after a gap of 27 months. This was led by the sharpest decline in vegetable prices (-18.26 per cent) since October 2023 and the steepest fall in pulses prices (-5.6 per cent) since October 2018. Potato prices declined further (-24.3 per cent), while protein-rich items like eggs, meat and fish (-0.29 per cent) saw a price drop for the first time since October 2024.
The easing food inflation is expected to bring relief to households and boost consumption demand as the new financial year begins. Rahul Agrawal, senior economist at ICRA Ratings, said wholesale food price inflation is expected to soften further in May, aided by a favourable base and relatively moderate wholesale prices of essential food items so far this month.
Fuel and power prices declined by 2.2 per cent in April due to a deceleration in global commodity prices, especially of mineral oils, leading to a fall in the prices of kerosene, air turbine fuel and petrol.
The prices of both petrol (-7.7 per cent) and high speed diesel (-5.04 per cent) continued to decline for the 11th and 24th consecutive month, respectively. The price of cooking gas also dipped (-0.41 per cent) for the first time since April 2024.
Among manufactured products, prices for cement, lime and plaster remained in deflation (-1.42 per cent) for the 16th month in a row, while prices for basic metals dipped (-0.64 per cent) due to a fall in global prices during the month.
Meanwhile, the price rise for other major manufactured goods like textiles (0.52 per cent), apparel (0.65 per cent), paper and paper products (2.1 per cent), pharmaceuticals (0.98 per cent), semi-finished steel (0.25 per cent) and food products (9.51 per cent) also decelerated. However, the price rise for manufactured vegetable and animal oils, despite slowing, remained in double digits (28.7 per cent) during April. ALSO READ:
Paras Jasrai, associate director at India Ratings and Research, noted that the declining trend in manufactured products was broad-based, with core inflation also moderating after six consecutive months of increase. It stood at a three-month low of 1.3 per cent in April due to a decline in base metal prices.
'The temporary lowering of tariffs by the US and China helps in controlling the heightened uncertainty and volatility. Muted commodity prices along with a favourable base effect for the food segment would keep wholesale inflation around 0.5 per cent in the near term,' he added.
The drop in factory gate inflation for April comes a day after India's retail inflation also moderated to a nearly six-year low of 3.16 per cent, aided by a double-digit fall in vegetable prices and the steepest decline in pulses prices in over six years.
'This dual disinflation offers a substantial macroeconomic tailwind, with the pricing environment favourable for rural consumption recovery. This strengthens the case for future rate cuts — a move that will lower borrowing costs, revive capex appetite among companies and offer rate-sensitive sectors a timely boost,' said Mahendra Patil, managing partner, MP Financial Services.