Wholesale inflation eases to 13-month low of 0.85% in April as food, fuel prices soften

Wholesale price index (WPI)-based inflation eased to a 13-month low of 0.85% in April as food prices and energy prices softened, data from the commerce ministry showed on Wednesday. The inflation gauge, which is based on factory gate prices, was at 2.05% in March and 1.19% last April. 

The latest WPI inflation figure is the lowest since March 2024, when it came in at 0.53%, which was later revised to 0.26%, indicating cost pressures are easing at the producer level. Retail inflation eased in April to its slowest pace in over six years on the back of lower food prices. 

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Data showed primary articles, which comprise food items such as cereals, vegetables, eggs, meat and fish, as well as non-food articles such as crude petroleum and natural gas saw prices decline year-on year, meaning inflation in this category slipped to negative territory. Pulses saw 5.57% deflation year-on-year, vegetables 18.26%, and potato 24.3%. 

Food and crude deflation

WPI food index inflation eased to 2.55% in April from 4.66% in March, the data showed. This is an 18-month low, India Ratings and Research associate director Paras Jasrai wrote in an analysis. “Easing food inflation would help in bringing relief to households and the consumption demand as we begin the new fiscal,” he said.

Crude petroleum and natural gas saw 15.5% deflation in April. Since last November, this segment has seen prices ease as global economic growth has faced geopolitical and trade-related uncertainty.

The Indian basket of crude oil was at an average of $67.73 a barrel in April, down from $89.44 a barrel last April and $72.47 in March, according to data from the petroleum ministry's petroleum planning and analysis cell.

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Experts expect a favourable monsoon and prospects of higher production to keep food inflation in check. On the other hand, global commodity prices are likely to remain contained despite the US's softening stance on tariffs, amid China’s continued economic challenges. 

“Global growth prospects too appear to be in jeopardy amidst uncertainty over US tariffs. The above backdrop suggests that WPI inflation is likely to remain benign in FY26 as well,” according to an analysis shared by Madan Sabnavis, chief economist at Bank of Baroda. 

Manufactured goods

Manufactured products, which include processed food items, vegetable oils and animal fats, basic metals, and textiles and apparel saw moderate 2.62% year-on-year inflation in April. This revealed underlying cost pressures in some industrial sectors. 

“Muted commodity prices along with a favourable base effect for food segment would keep the wholesale inflation around 0.5% in the near term,” said the analysis shared by India Ratings.

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The government expects nominal GDP to expand 10.1% in the current financial year. On Tuesday, official data showed annual inflation based on the consumer price index (CPI) softened to 3.16% in April, its lowest level since July 2019.