Wholesale inflation eases to 14-month low of 0.39% in May

India’s wholesale inflation eased to a 14-month low of 0.39% in May compared with 0.85% in April, according to data released by the government. This is the third straight month of decline in the Wholesale Price Index (WPI).

The positive rate of inflation in May 2025 is primarily due to an increase in prices of manufacturing of food products, electricity, other manufacturing, chemicals and chemical products, manufacture of other transport equipment and non-food articles etc, the ministry of commerce and industry said.

The index for primary articles decreased by 0.05 % to 184.3 in May 2025 from 184.4 (provisional) for the month of April 2025. The price of minerals (-7.16%) and non-food articles (-0.63%) decreased in May 2025 as compared to April 2025. The price of food articles (0.56%) increased in May 2025 as compared to April 2025.

The index for fuel and power declined by 0.95% to 146.7 in May, 2025 from 148.1 for the month of April, 2025. Price of mineral oils (-2.06%) decreased in May, 2025 as compared to April, 2025. The price of coal (0.81%) and electricity (0.80%) increased in May, 2025 as compared to April, 2025.

The index of manufactured products remained unchanged at 144.9 in May 2025. Some of the important groups that showed month-over-month increase in prices were other manufacturing; manufacture of other non-metallic mineral products; computer, electronic and optical products; pharmaceuticals, medicinal chemical and botanical products and textiles etc. Some of the groups that witnessed a decrease in prices were manufacture of food products, basic metals; rubber and plastics products, chemical and chemical products and electrical equipment etc in May 2025 as compared to April 2025.

India’s retail inflation slumped to a six-year low in May, thereby increasing expectations of a sustained ease in price pressures. As per government data released on June 12, consumer price inflation slowed to a 2.82% year-on-year, which is down 34 basis points from its April figure, thereby marking the lowest level reached since February 2019.

The deceleration in prices has been driven by a sharp fall in food inflation, plus favourable base effects and muted rise in key household categories. The Consumer Food Price Index (CFPI), which is an indicator of food inflation, eased to 0.99% in May, down from 1.78% in April, showcasing a reduction in prices across key categories, like vegetables, pulses, fruits, cereals, sugar, and eggs.

Earlier this month, following a 50-basis points reduction in repo rate, the Reserve Bank of India Governor, Sanjay Malhotra, in a press briefing had pointed out that the central bank’s monetary policy measure was taken in lieu of easing inflationary signals in the Indian economy. “Inflation has softened significantly over the last six months from above the tolerance band in October 2024 to well below the target, with signs of broad-based moderation,” RBI Governor Malhotra had said following the monetary policy announcement earlier this month.