WPI Inflation Softens to 0.13% in September as Food, Fuel Prices Ease
New Delhi, October 14, 2025: India’s wholesale price index (WPI)-based inflation eased to 0.13% in September 2025, compared to 0.52% in August and 1.91% a year ago, according to data released by the Ministry of Commerce and Industry on Tuesday.
The moderation in WPI inflation was primarily driven by easing prices in food articles, fuel, and manufactured products, signaling improved supply conditions and softening global commodity trends.
Food Prices Witness Sharp Deflation
The data revealed that food articles recorded a deflation of 5.22% in September, compared to 3.06% in August. Among them, vegetables experienced the steepest price drop — with deflation accelerating to 24.41%, against 14.18% in August.
A significant fall in prices of onions, tomatoes, and potatoes contributed to this decline, which analysts attribute to improved crop arrivals and better supply chain management following the monsoon harvest season.
The Ministry of Commerce and Industry noted in its statement:
“The positive rate of inflation in September 2025 is primarily due to an increase in prices of the manufacture of food products, other manufacturing, non-food articles, transport equipment, and textiles. However, deflation in primary food items and energy products helped contain the overall index.”
Experts suggest that the sharp cooling in wholesale food inflation will help stabilize consumer price inflation (CPI) in the coming months, providing relief to both consumers and policymakers.
Manufactured Products Show Mild Price Easing
Inflation in manufactured products, which account for nearly two-thirds of the WPI basket, eased to 2.33% in September, down from 2.55% in August.
This decline indicates a slowdown in cost pressures for producers, especially in segments such as textiles, chemicals, and metal products, where global input prices have fallen in recent months.
Economists say the moderation could help revive industrial demand, which has remained subdued amid tight liquidity conditions and cautious consumer spending.
“Manufactured product inflation easing below 2.5% reflects improved cost control among industries,” said Dr. Meera Sanyal, senior economist at Delhi Policy Forum.
“This is a positive sign for India’s manufacturing sector, especially as the festive season demand picks up. It also gives comfort to the RBI that wholesale price stability is holding even as retail inflation stays low.”
Fuel and Power Continue in Deflation Zone
The fuel and power category witnessed deflation of 2.58% in September, compared to 3.17% in August, continuing its negative trend for several months.
This decline has been driven by lower crude oil prices in international markets and stable domestic fuel taxation. With Brent crude averaging below $80 per barrel in September, India’s import bill saw relief, improving the macroeconomic outlook.
Lower energy costs also helped reduce transport and logistics expenses, indirectly supporting manufacturing and retail sectors.
Retail Inflation at Eight-Year Low
In a related development, India’s retail inflation (CPI) — the measure most closely watched by the Reserve Bank of India (RBI) — fell to an eight-year low of 1.5% in September 2025, as per data released on Monday.
This marks a significant drop from 2.4% in August, driven largely by cooling food and fuel prices.
The RBI, which kept the repo rate unchanged at 5.5% earlier this month, is expected to maintain its cautious stance until there is clarity on global economic trends and domestic growth momentum.
Economists believe the latest WPI and CPI numbers together indicate that inflationary pressures are well under control, potentially creating room for monetary easing in early 2026 if growth requires support.
Government and RBI’s Balancing Act
While the decline in wholesale and retail inflation offers short-term relief, policymakers remain vigilant about risks from global oil prices, climate-linked crop disruptions, and currency fluctuations.
A senior government official from the Ministry of Finance, speaking on condition of anonymity, told TheTrendingPeople.com:
“The current phase of low inflation is encouraging, but we cannot be complacent. Any disruption in global energy markets or poor winter crop output could quickly reverse this trend. The government and RBI are closely monitoring these dynamics.”
The government has also increased monitoring of essential commodity prices to ensure that the benefits of wholesale price moderation are transmitted to consumers.
Impact on Economy and Consumers
The easing WPI inflation is expected to positively impact industrial margins, input costs, and export competitiveness. Sectors such as automobile manufacturing, textiles, and consumer goods are likely to see reduced cost pressures.
However, for farmers, prolonged deflation in food articles could pose challenges. Falling farm-gate prices may affect rural income levels, unless accompanied by higher procurement or targeted support measures.
Financial analysts also see a potential impact on bond yields and monetary policy. Lower inflation could prompt the RBI to maintain an accommodative stance, possibly leading to improved credit flow for businesses and households in the coming quarters.
Historical Context
India’s WPI inflation has been on a downward trajectory for much of 2024 and 2025, following a volatile phase during the post-pandemic global commodity surge.
At its peak in mid-2022, wholesale inflation had soared to double digits due to soaring energy and food prices globally. The moderation over the past year reflects both stabilizing global markets and domestic policy interventions such as improved food supply chains, export controls on certain commodities, and increased energy self-reliance initiatives.
Final Thoughts from TheTrendingPeople.com
The latest data suggests India’s economy is entering a period of price stability, providing much-needed space for fiscal and monetary policy coordination. While the moderation in wholesale inflation signals healthier supply-side dynamics, sustaining this trend will depend on global energy prices, agricultural performance, and domestic demand recovery.
For now, both households and businesses can take comfort in the fact that the worst of the inflationary cycle seems behind us — marking a potential turning point for India’s growth story in the second half of FY2025–26.