Wholesale Inflation Rises to Four-month High of 0.52 pc in August
“Positive rate of inflation in August 2025 is primarily due to an increase in prices of food products, manufacturing, non-food articles, non-metallic mineral products and transport equipment etc. Deflation in food articles narrowed to 3.06 per cent in August, from 6.29 per cent in the previous month,” the industry ministry said in a statement
New Delhi: India’s wholesale inflation rose to a four-month high of 0.52 per cent in August against (-) 0.58 per cent in July, snapping a two-month spell of contraction, as food prices pushed the index back into positive territory, the provisional data from the commerce and industry ministry showed Monday.
However, wholesale price inflation, based on the wholesale price index or WPI, was 1.25 per cent in August last year. Reversing the deflationary trend of the past two months, (-) 0.58 in July and (-) 0.19 per cent in June, the WPI inflation rose to its highest level since April, when it was 0.85 per cent.
“Positive rate of inflation in August 2025 is primarily due to an increase in prices of food products, manufacturing, non-food articles, non-metallic mineral products and transport equipment etc. Deflation in food articles narrowed to 3.06 per cent in August, from 6.29 per cent in the previous month,” the industry ministry said in a statement.
The ministry further showed that deflation in vegetables and pulses eased to 14.18 per cent and 14.85 per cent from 28.96 per cent and 15.12 per cent, respectively. “In potato and onion, however, the deflation deepened to 44.11 per cent and 50.46 per cent in August, from 41.26 per cent and 44.38 per cent, respectively in July,” it said.
In the case of manufactured products, the data further showed that inflation was higher at 2.55 per cent in August, as against 2.05 per cent in the month before. “The hardening in prices was broad-based across all segments, except fuel and power, which witnessed a deeper deflation in August 2025 as compared to July 2025,” said Icra senior economist Rahul Agrawal.
Industry chamber PHDCCI president Hemant Jain also said that among manufactured products, major contributors to inflation were vegetable and animal oils & fats, textiles, and rubber & plastic products, which may reflect in production costs with a lag. “Going forward, we expect WPI inflation to moderate with the government's continued support through structural reforms such as GST 2.0,” Jain added.
However, Icra expects the headline WPI to rise further to a six-month high of 0.9 per cent in September 2025, led by a hardening in the year-on-year prints for global crude oil and commodity prices, as well as the depreciation in the $/Re pair. Nevertheless, the Reserve Bank of India, which takes into account retail inflation, had kept benchmark policy rates unchanged at 5.5 per cent last month.
“While the expectations of a relatively more favourable CPI inflation trajectory following the GST rationalisation opens up space for a rate cut by the MPC, the positive impact of the same on growth outcomes in H2 FY2026, along with the stronger-than-expected GDP growth in Q1 is likely to result in a status quo in the upcoming October (MPC) review meeting,” Agrawal said.
