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Key Points

India's wholesale inflation has been steadily declining for seven consecutive months, signaling improved economic conditions. Industry experts like Hemant Jain are optimistic about the potential for reduced operational costs and increased consumption. The negative WPI inflation is attributed to lower prices in food, fuel, and manufactured products. This trend is expected to continue, supporting India's economic growth trajectory.

Key Points: India WPI Inflation Falls Seventh Month Boosting Growth Outlook

  • Wholesale inflation turns negative at -0.13% in June 2025
  • Food and fuel prices show significant downward trend
  • Domestic demand and economic activity remain strong
  • Experts anticipate continued moderate inflation
3 min read

Falling wholesale inflation in India to boost demand and growth: Industry

Wholesale inflation decline signals positive economic momentum, with industry experts predicting cost reductions and improved business sentiment

"This moderation in prices will help businesses manage costs better - Hemant Jain, PHDCCI President"

New Delhi, July 14

The continuous fall in wholesale price index (WPI) inflation for the seventh month in a row is a good sign for India's economy as it will reduce operational costs for companies, boost domestic demand and support economic growth, industry experts said on Monday.

Hemant Jain, President of PHD Chamber of Commerce and Industry (PHDCCI), said the persistent softening of wholesale inflation since December 2024 is encouraging and reflects improving macroeconomic conditions.

He noted that WPI inflation declined from 2.57 per cent in December 2024 to (-)0.13 per cent in June 2025 -- strengthening business sentiment across sectors.

"This moderation in prices will help businesses manage costs better and can provide a push to consumption-led growth," said Jain, adding that the outlook remains positive given the rising domestic demand, expectations of a normal monsoon, and strong economic activity.

"Looking ahead, considering the rise in domestic demand, expectations of a normal monsoon, and strong overall economic activity in the country, we anticipate WPI inflation to remain moderate in the coming months despite ongoing geopolitical uncertainties, Jain mentioned.

Official data from the Ministry of Commerce and Industry showed that wholesale inflation in June turned negative at (-)0.13 per cent, compared to 0.39 per cent in May.

The last time WPI inflation had entered negative territory was in April 2023. A similar trend was seen during the initial days of the COVID-19 pandemic in July 2020.

According to the commerce ministry, the decline in inflation was mainly due to lower prices of food articles, mineral oils, crude petroleum, natural gas and basic metal products.

Jain echoed this, noting a sharp drop in prices of primary articles (from -2.02 per cent in May to -3.38 per cent in June), fuel and power (from -2.27 per cent to -2.65 per cent), and manufactured products (from 2.04 per cent to 1.97 per cent).

Food inflation, which often affects household budgets directly, also eased significantly -- from 5.83 per cent in January 2025 to (-)3.75 per cent in June -- thanks to lower prices of cereals, vegetables, pulses, fruits, eggs, meat, fish, and milk.

Reacting to the data, Rahul Agrawal, senior economist at ICRA, said that the seasonal rise in food prices in July has been modest so far and may keep food inflation in the deflationary zone unless vegetable prices see a sudden surge.

"Additionally, a decline in international crude oil prices and a stable USD/INR exchange rate are expected to support the current deflationary trend," he added.

"Overall, we expect the headline WPI to remain in deflation in July 2025 as well," he said.

- IANS

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Reader Comments

S
Sarah B
As an expat working in India, I've noticed grocery bills becoming more reasonable. But I wonder - are these benefits reaching rural areas equally? The article focuses mostly on urban industry perspective.
A
Ananya R
Positive news indeed! But we must ensure farmers aren't suffering due to lower food prices. MSP system needs to work effectively to protect their interests. Balance is crucial for sustainable growth.
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Vikram M
Good for manufacturing sector! Lower input costs should ideally translate to more competitive pricing. Hope companies pass on these benefits to consumers instead of just increasing profit margins.
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Karthik V
While the numbers look promising, I'm skeptical about how long this will last. Monsoon performance is still uncertain and global oil prices can be volatile. RBI should remain cautious with rate cuts.
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Priya S
As a small business owner, this is music to my ears! Lower wholesale prices mean better margins. Maybe now I can give that salary hike to my employees that's been pending since last Diwali 😊

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