India’s wholesale inflation slipped into negative territory for the first time in 2025, with the Wholesale Price Index (WPI)-based inflation falling to -0.13% in June, according to data released by the Ministry of Commerce and Industry on Monday. The decline was primarily driven by a drop in food and fuel prices.
Food prices, which account for 24.38% of the WPI basket, fell 0.26% year-on-year, while fuel and power prices, comprising 13.15% of the index, dropped by 2.65% compared to June 2024.
On the other hand, manufactured products, which represent the largest share of the index at 64.23%, rose by 1.97% year-on-year. However, the pace of increase moderated, down from 2.04% in May and 2.62% in April.
This wholesale disinflation aligns with the recent moderation in retail inflation. Consumer Price Index (CPI)-based inflation cooled to 2.82% in May, its lowest level since February 2019.
Responding to the softer inflation outlook, the RBI in its monetary policy review last month cut the repo rate by 50 basis points, from 6.0% to 5.5%, in a bid to stimulate economic growth.
Additionally, the central bank announced a phased reduction in the Cash Reserve Ratio (CRR), from 4% to 3%, to be implemented in four tranches of 25 basis points each.
With headline CPI well below the RBI’s medium-term target of 4%, the central bank also revised its inflation forecast for 2025–26 down from 4.0% to 3.7%.