Wholesale price inflation (WPI) declined to 0.13 percent in September due to lower prices of food items and manufactured goods, according to government data released on Tuesday. The WPI-based inflation rate was 0.52 percent in August and 1.91 percent in September of the previous year. The Industry Ministry noted that the positive inflation rate in September 2025 was mainly influenced by rising prices in the manufacturing of food products, other manufacturing sectors, non-food items, various transport equipment, and textiles. WPI data revealed that food articles experienced deflation of 5.22 percent in September, compared to 3.06 percent in August, with vegetable prices also falling significantly. Specifically, vegetable deflation was 24.41 percent in September, in contrast to 14.18 percent in August.
For manufactured products, inflation decreased to 2.33 percent from 2.55 percent in August. Fuel and power showed negative inflation at 2.58 percent in September, down from 3.17 percent the previous month. Barclays India’s Chief Economist Aastha Gudwani indicated that due to generally lower global commodity prices, WPI inflation is projected to remain subdued for an extended period. Additionally, India Ratings and Research’s Associate Director Paras Jasrai highlighted that core inflation reached a 31-month peak of 1.9 percent in September 2025, driven by a substantial increase in jewelry prices at 34.1 percent year-over-year. Wholesale inflation remained flat at 0.02 percent in the second quarter of FY26, marking an eight-quarter low.
This, combined with record-low retail inflation, is likely to lead to muted GDP deflator growth and exert pressure on corporate margins in the second quarter of FY26. A favorable base effect is anticipated to drive the wholesale index back into deflation in October 2025.