Wholesale inflation dips into negative territory on food, fuel deflation

India’s wholesale price inflation entered the negative zone in June 2025 after 19 months, declining by 0.13 per cent due to falling food and fuel prices

New Delhi: Wholesale price inflation (WPI) turned negative after a gap of 19 months, declining 0.13 per cent in June as deflation widened in food articles and fuel, along with softening in manufactured product costs, government data showed on Monday.

WPI-based inflation was 0.39 per cent in May. It was 3.43 per cent in June last year. “Negative rate of inflation in June, 2025 is primarily due to decrease in prices of food articles, mineral oils, manufacture of basic metals, crude petroleum & natural gas etc,” the industry ministry said in a statement.

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As per WPI data, food articles saw a deflation of 3.75 per cent in June, as against a deflation of 1.56 per cent in May, with vegetables seeing a sharp drop. Deflation in vegetables was 22.65 per cent in June, compared to 21.62 per cent in May.

In the case of manufactured products, inflation was at 1.97 per cent, compared to 2.04 per cent in May. Fuel and power saw a negative inflation or deflation of 2.65 pc in June, compared to a deflation of 2.27 pc in May.

PHDCCI President Hemant Jain said the continuous softening of WPI inflation for seven months in a row is a positive sign for higher economic growth in India. “Looking ahead, considering the rise in domestic demand, expectations of a normal monsoon, and strong overall economic activity in the country, we anticipate WPI inflation to remain moderate in the coming months despite ongoing geopolitical uncertainties,” Jain added.

ICRA senior Economist Rahul Agrawal said the seasonal sequential uptick in food prices has been relatively modest in July 2025 so far, which is expected to keep food print in the deflationary zone, unless there is an unusual surge in such prices in the remaining part of the month, especially for vegetables.

Besides, international crude oil prices have also eased somewhat in the ongoing month from the peak seen in June 2025, amid cooling tensions in West Asia, while remaining in deflationary territory on a year-on-year basis.

Further, the USD/INR pair has also remained range-bound so far. “Overall, ICRA expects the headline WPI to remain in the deflationary territory in July 2025 despite an unfavourable base, amid the sustained YoY deflation in food and crude oil prices,” Agrawal said.

India Ratings and Research Paras Jasrai said the wholesale inflation in the first quarter of this fiscal stood at a five-quarter low of 0.4 per cent. “The muted input price growth in the economy would provide support to the corporates in maintaining their margins at a time when industrial output growth has faced deceleration on account of weather vagaries,” according to Ind-Ra.

The Reserve Bank of India (RBI) mainly takes into account retail inflation while formulating the monetary policy. Retail inflation data for June is scheduled to be released later in the day. The RBI last month cut benchmark policy interest rates by a sharp 0.50 per cent to 5.50 per cent amid easing inflation.