India’s WPI inflation hits two-year low in july on softer food, fuel prices

THEBUSINESSBYTES BUREAU

NEW DELHI, AUGUST 14, 2025

India’s wholesale price inflation slid deeper into the negative zone in July, touching a two-year low of (-) 0.58 per cent year-on-year, as easing food and fuel costs provided relief to producers and consumers alike. The fall, revealed in Commerce and Industry Ministry data on Thursday, comes after June’s reading of (-) 0.13 per cent and extends the steady decline seen since March.

The latest figures show a 2.15 per cent drop in the food index and a 2.43 per cent fall in fuel prices, including petrol, diesel, and natural gas, compared with July last year. The deflationary trend is expected to trickle down to retail prices, with cheaper fuel lowering transport costs and easing supply chain expenses.

On the retail front, inflation measured by the Consumer Price Index (CPI) also cooled sharply to 1.55 per cent in July from 2.1 per cent in June, marking its lowest year-on-year reading since June 2017. Food inflation turned negative at (-) 1.76 per cent, driven by falling prices of pulses, vegetables, cereals, eggs, and sugar, while modest declines were also seen in transport, communication, education, and housing costs.

Analysts attribute the drop to a favourable base effect, strong monsoon progress, robust kharif sowing, and ample foodgrain buffer stocks. The Reserve Bank of India (RBI) has projected CPI inflation at 3.1 per cent for 2025-26, noting a “more benign” outlook than anticipated earlier this year.