India's Wholesale Inflation Turns Negative: What -1.42% Means for Economy

Wholesale Price Index (WPI), according to their assessment, likely turned negative in October 2025 at (-) 1.42 per cent, compared to 0.13 per cent in September 2025 and 2.75 per cent in October last year.

"Apart from the high base effect, the decline in WPI was largely driven by a sharp fall in the food WPI, even as core WPI remained in positive territory," the Bank said in its report post assessment.

Both food and fuel continued to remain negative in September 2025.

The high base effect was also instrumental in keeping both headline and food inflation subdued, as the headline WPI and food WPI in October 2024 likely stood at 2.75% and 12.1%, respectively.

The Food WPI is likely to have slipped deeper into negative territory under the combined impact of a high base and easing food prices. During the month, food prices likely corrected notably in a few segments--especially vegetables.

"Vegetables WPI likely dropped to an all-time low during the month. Notably, the recent floods in some northern states appear to have had little to no impact on food prices, which has been a welcome surprise" the Bank's assessment found.

Fuel WPI likely remained in the deflationary zone for the 15th consecutive month in October 2025, reflecting a broad-based decline across crude, mineral oils, and electricity segments, though coal inflation likely showed a slight uptick.

Crude oil prices fell by 6 per cent month-on-month in October.

The subdued global oil price environment is expected to continue keeping fuel WPI contained, it said.

Looking ahead, global commodity price trends and geopolitical developments warrant close monitoring, particularly amid uncertainties related to tariffs.

The actual impact of the recent GST rate cuts will become clearer after the upcoming data release.

For 2025-26, Union Bank of India projects overall WPI inflation to track below 0.5 per cent. However, potential upside risks--such as unseasonal winter rains or renewed geopolitical tensions--remain key factors to watch closely, it cautioned.

Wholesale inflation turned positive in August after remaining negative for the preceding two months. A little wholesale inflation is considered by many economists to be healthy, as it pushes businesses to manufacture or produce more.

The government releases the index number of wholesale price in India every month on the 14th of every month (or next working day, if the 14th falls on a holiday) with a time lag of two weeks of the reference month, and the index number is compiled with data received from institutional sources and selected manufacturing units across the country.

Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory well. The RBI held its benchmark repo rate steady at 6.5 per cent for the eleventh consecutive time, before cutting it for the first time in about five years in February 2025.

- ANI