Archive · 14 Nov 2025
India's Wholesale Inflation Hits 27-Month Low Amid Falling Prices
Imagine that prices for things businesses buy usually go up a little bit each year.
This is called inflation.
In India, for the month of October, the prices of many things businesses buy actually went down a lot.
This made the inflation rate negative, meaning there was deflation, for the fourth time in six months and the lowest it's been in over two years.
This happened because food items like vegetables and onions became much cheaper, helped by a good rainy season.
Also, fuel and some manufactured goods saw their prices decrease.
A recent change in the Goods and Services Tax (GST) also made things less expensive.
The prices people pay in stores (retail inflation) also hit a very low point.
Because prices are going down so much, some people think the country's central bank might lower interest rates soon.
India's wholesale price inflation dropped to -1.21% in October, its lowest level in 27 months.
This deflation was largely driven by falling prices in food articles, especially vegetables and onions, alongside declines in crude petroleum, natural gas, and basic metals.
Retail inflation also plunged to a record low of 0.25% in October, influenced by similar factors.
A good monsoon, a favorable base effect from the previous year, and recent Goods and Services Tax (GST) rate reductions contributed to the price slump.
The significant decrease in both wholesale and retail inflation raises expectations for a potential interest rate cut by the Reserve Bank of India in its upcoming December meeting.
- Who
- Government of India, Ministry of Commerce & Industry, National Statistics Office (NSO)
- What
- Wholesale Price Index (WPI) inflation fell to -1.21% in October, the lowest in 27 months. Retail inflation also dropped to a series-low of 0.25%.
- When
- October (data released on Friday and Wednesday respectively)
- Where
- India
- Why
- Primarily due to sharp declines in food articles (vegetables, onions), crude petroleum & natural gas, electricity, and basic metals, influenced by a good monsoon, a favorable base effect, and Goods and Services Tax (GST) rate cuts.
Factors Contributing to Price Decline
Future Price Trends and Economic Outlook
Impact of GST Rate Reductions
Factors Contributing to Price Decline
The reduction in Goods and Services Tax (GST) rates, effective September 22, directly contributed to lower wholesale and retail inflation.
Future Price Trends and Economic Outlook
The government implemented GST reforms, simplifying the tax structure, which is cited as a factor supporting the deflation in wholesale prices.
Food Price Deflation
Factors Contributing to Price Decline
Significant deflation in food articles, particularly vegetables and onions, was a primary driver of negative WPI inflation, supported by a good monsoon and healthy kharif harvest.
Future Price Trends and Economic Outlook
While food price declines contribute to lower inflation, their long-term impact on farm incomes and consumption demand is a point of observation.
Monetary Policy Implications
Factors Contributing to Price Decline
The sustained decline in both retail and WPI inflation, falling significantly, increases the likelihood of an interest rate cut by the Reserve Bank of India in its upcoming December meeting.
Future Price Trends and Economic Outlook
While inflation is low, the RBI's decision on interest rates may also consider India's economic growth trajectory and other economic factors beyond just inflation figures.
- October WPI Inflation
- -1.21% year-on-year
- October 2022 WPI Inflation
- 2.75% year-on-year
- July 2023 WPI Inflation
- -1.2% year-on-year
- WPI Food Index Inflation in October
- -5.04%
- WPI Food Index Inflation in September
- -1.99%
- Vegetable Price Change (WPI) in October
- Declined
- Onion Price Change (WPI) in October
- Declined
- Fuel and Power Inflation in October
- -2.55%
- Manufactured Products Inflation in October
- 1.54%
- October Retail Inflation (CPI)
- 0.25%
Sources
Retail inflation turned negative in October; Here’s why
Gold Today Rate, November 14: Check 18, 22 and 24 carat gold prices Chennai, Mumbai, Delhi, Kolkata and other cities
With inflation at 13-yr low, economists bet on RBI easing cycle
India's WPI inflation falls further in negative zone to (-) 1.21 per cent during October
October WPI inflation drops to –1.21% on sharp drop in food prices, GST rate cut
WPI inflation falls to (-) 1.21% in October on GST cut, favourable base
Wholesale price inflation falls to (-) 1.21% in Oct on GST cut
Wholesale inflation in October stays negative for fourth month at 1.21%
WPI inflation falls to 27-month low of (-) 1.21 pc in Oct on GST cut, favourable base
Wholesale inflation falls to 27-month low in October as food prices slump
