India’s WPI inflation falls to 13-month low

India’s wholesale inflation fell to a 13-month low of 0.85% in April, down from 2.05% in March and 2.38% in February, according to data released by the Ministry of Commerce and Industry on Wednesday. This sharp deceleration reflects easing price pressures across key sectors.

On a month-over-month basis, the Wholesale Price Index (WPI) declined by 0.19% in April, continuing the downward trend seen in recent months. The drop was largely driven by falling food prices and a double-digit decline in fuel prices, which pulled overall inflation into negative territory on a monthly basis.

In parallel, retail inflation also eased. As per data released by the Ministry of Statistics on Tuesday, Consumer Price Index (CPI)-based inflation dropped to 3.16% in April, down from 3.34% in March, marking its lowest level since July 2019.

A significant factor in this decline was the moderation in food inflation, which slowed to 1.78% in April from 2.69% in March. Given that food prices account for nearly half of the CPI basket, this has brought much-needed relief to household budgets.

This marks the third consecutive month that retail inflation has stayed below the Reserve Bank of India’s (RBI) 4% medium-term target, providing the central bank with greater flexibility to maintain its accommodative monetary policy stance aimed at supporting economic growth.

In its recent monetary policy review, the RBI Governor, Sanjay Malhotra noted that the inflation outlook has improved considerably. The Monetary Policy Committee (MPC) has revised its inflation forecast for 2025–26 down to 4%, from an earlier estimate of 4.2%, citing a more favourable outlook for food prices.

The easing of uncertainties around Rabi crop production, along with the second advance estimates pointing to record wheat output and improved pulse production, are expected to further help contain food inflation. Coupled with strong Kharif arrivals, this sets the stage for a more durable softening of inflationary pressures.

Additionally, the latest RBI survey shows a sharp decline in inflation expectations over the next three months and one year, which is likely to help anchor inflationary sentiment going forward.