New Delhi: Wholesale price inflation remained in negative territory for a second straight month in November, as prices of food articles, mineral oils, crude petroleum and natural gas declined, official data showed on Monday.
Wholesale Price Index (WPI)-based inflation eased to -0.32% year-on-year in November, down from 2.16% a year ago, but rose from -1.21% in October, data released by the Department for Promotion of Industry and Internal Trade (DPIIT) showed.
The negative reading reflects a sharp cooling in wholesale prices especially in the last two months, driven mainly by supply-side factors. Food prices, which have a large weight on the WPI, fell 2.6% year-on-year in November, led by steep declines in vegetables, pulses and onions, even as prices of cereals and milk remained relatively firm.
Fuel and power prices also stayed in deflation on an annualized basis, declining 2.27%, driven by softer global energy prices and moderated domestic electricity tariffs. Manufactured products, which account for over 64% of the index, continued to show muted price pressures, with inflation in the segment limited to 1.33%, indicating weak pricing power among producers amid subdued demand conditions.
On a month-on-month basis, however, wholesale prices rose 0.71% in November, pointing to a mild rebound after two consecutive months of contraction. The sequential uptick was driven largely by a rise in primary articles, particularly food items, suggesting seasonal pressures and the possibility that the pace of disinflation may moderate in the coming months.
Wholesale price inflation in negative territory signals easing input costs for manufacturers and wholesalers, reducing the risk of cost-push inflation.
For households, the immediate impact is indirect, but important. Lower wholesale prices for food, fuel and industrial inputs can help stabilize retail inflation, improve affordability and support purchasing power, especially if firms choose to absorb costs rather than raise prices. This is particularly relevant at a time when consumers remain sensitive to food price volatility.
From a policy perspective, the soft WPI reading reassures policymakers that supply-side price pressures are under control. While the Reserve Bank of India (RBI) focuses mainly on retail price inflation, low wholesale price inflation eases concerns over cost shocks and gives policymakers more room to prioritize consumption demand and fuel growth.
However, economists caution that stronger growth expectations in the US and potential pressure on the rupee could lift commodity prices and add to fuel inflation risks in the coming months. “Core inflation stayed elevated at 1.5% in November, unchanged from October and higher than 0.6% a year ago, even as manufactured product inflation eased to 1.3% from 2.1% last year and 1.5% in October,” said Sonal Badhan, economist, Bank of Baroda.
“The pace of WPI deflation narrowed faster than expected to 0.3% in November from 1.2% in October, reflecting base effects, a weakening rupee and firming prices of select commodities. With further depreciation in the rupee, some hardening in commodity prices and an unseasonal rise in vegetable prices—despite soft crude oil—we expect WPI inflation to turn positive at around 0.5% in December and average above 1.5% in the fourth quarter of FY26. This should support a gradual normalization of the GDP deflator, with WPI inflation now likely to average around 0.4% in FY26,” said Aditi Nayar, chief economist and head of research and outreach at Icra.
Among manufactured goods, eight of 22 subindices saw slower price increases, led by food products, beverages, chemicals, leather, rubber and plastics, basic metals, electronics and electrical equipment, while textiles and pharmaceuticals recorded higher inflation.
Deflation in basic metals extended for an eighth straight month, with domestic prices softening further, even as global metal prices showed mixed trends—signalling upside risks if external conditions tighten.
India’s retail inflation edged up to 0.7% in November, from a historic low of 0.25% in October, as continued declines in food prices offset a mild rise in fuel inflation. Even so, November’s reading marks the second-lowest level recorded in the current Consumer Price Index (CPI) series.