WPI slide: Inflation falls to -1.21% in October; food prices see steep deflation
The industry ministry said October’s negative print was driven by lower prices of food articles, crude petroleum and natural gas, electricity, mineral oils and basic metals, PTI reported.
Food inflation saw the steepest fall, with overall deflation widening to 8.31% from 5.22% in September.
Prices of vegetables, pulses and key staples dropped sharply, led by onion and potato.Vegetable prices fell 34.97% in October compared with 24.41% in September, while pulses saw deflation of 16.50%.
Potato prices slid 39.88% and onion prices recorded a sharp 65.43% decline.Manufactured product inflation eased to 1.54% from 2.33% in the previous month, while fuel and power remained in deflation for the seventh consecutive month at (-)2.55%, marginally lower than September’s (-)2.58%.Analysts expect wholesale prices to remain subdued for the next few months due to a favourable base and the impact of tax cuts.
“A favourable base effect in the rest of FY26 is expected to keep the wholesale index in deflation.
We anticipate WPI deflation in November to be under 1%,” said Paras Jasrai, Associate Director at India Ratings and Research.The slide in wholesale inflation comes soon after the September 22 reduction in Goods and Services Tax (GST) rates, which brought the four-tier tax structure down to two slabs — 5% and 18% — for several mass-consumption goods.
The rate cuts have fed into lower retail and wholesale prices.Retail inflation data released last week showed consumer price index (CPI) inflation dropping to a historic low of 0.25% in October, compared with 1.44% in September, helped by GST rationalisation and a high base effect.The Reserve Bank of India held its policy rate steady at 5.5% in its last review.
With both WPI and CPI declining sharply, expectations have risen that the Monetary Policy Committee may consider reducing the repo rate in the December 3–5 meeting.Jasrai noted that while domestic growth trends do not strongly justify monetary easing, the central bank may still opt for a 25–50 basis point rate cut to prevent prolonged economic sluggishness.
FY26 retail inflation is now projected to fall to about 2.5%, he added.Industry bodies also expect benign price conditions to persist.
PHDCCI CEO and Secretary General Ranjeet Mehta said wholesale inflation should remain range-bound given soft global crude prices, adequate foodgrain stocks and a healthy kharif harvest.
