Wholesale inflation (WPI) in India turned negative in June at -0.13%, down from 0.39% in May, according to official data from the Ministry of Commerce and Industry released on Monday. This marks a continuation of the easing inflation trend that began in April 2023, when WPI last entered negative territory. Similarly, during the early days of the COVID-19 pandemic in July 2020, the WPI was also negative.
The negative inflation rate in June 2025 primarily resulted from falling prices in food articles, mineral oils, manufacture of basic metals, crude petroleum, and natural gas, the commerce ministry stated. In 2023, the Wholesale Price Index-based inflation remained negative for seven consecutive months. Prior to this decline, WPI inflation had remained in double digits for 18 straight months until September 2022.
Economists often view a mild increase in wholesale inflation as beneficial, as it encourages manufacturers to produce more goods. The Department for Promotion of Industry and Internal Trade (DPIIT) releases the wholesale price index monthly on the 14th (or the next working day if the 14th falls on a holiday), compiling data from institutional sources and selected manufacturing units across India.
Meanwhile, consumer price inflation continues its downward trend, hitting a six-year low in May, offering relief to consumers. The Ministry of Statistics reported the year-on-year Consumer Price Index (CPI) inflation rate for May at 2.82% (provisional), the lowest since February 2019. This represents a decline of 34 basis points compared to April 2025. The retail inflation rate remains within the Reserve Bank of India’s (RBI) manageable target range of 2-6%.
The retail inflation figures for June are expected later today. The last time retail inflation breached RBI’s upper tolerance of 6% was in October 2024. Since then, it has remained comfortably within the 2-6% band, which RBI considers manageable.
Globally, inflation remains a concern, even for advanced economies, but India has largely managed its inflation trajectory well. The RBI held its benchmark repo rate steady at 6.5% for the eleventh consecutive time before cutting it for the first time in nearly five years in February 2025. Analysts expect inflation to stay under control, allowing the RBI to prioritize economic growth. The recent 50 basis points repo rate cut signals this strategic shift.
The inflation outlook for the fiscal year 2025-26 has been revised downward from the RBI’s earlier forecast of 4% to 3.7%, indicating optimism about continued price stability.
(From ANI)
