WPI inflation dips to 0.13% in September: Food and fuel costs ease; experts see muted price trend ahead

Wholesale price inflation (WPI) eased to 0.13% in September, driven by lower prices of food articles and manufactured goods, according to government data released on Tuesday. The reading compares with 0.52% in August and 1.91% in the same month last year.“The positive rate of inflation in September 2025 is primarily due to an increase in prices of the manufacture of food products, other manufacturing, non-food articles, other transport equipment and textiles, etc.,” the industry ministry said in a statement, PTI reported.Deflation in food articles deepened to 5.22% in September from 3.06% in August, with vegetable prices registering a sharp fall. Prices of vegetables declined 24.41% in September, compared to 14.18% a month earlier.Inflation in manufactured products eased to 2.33% in September from 2.55% in August, while the fuel and power category continued to show deflation at 2.58%, against 3.17% in the previous month.Amid generally lower global commodity prices, wholesale inflation is expected to remain subdued, said Barclays India Chief Economist Aastha Gudwani.India Ratings and Research Associate Director Paras Jasrai noted that core inflation rose to a 31-month high of 1.9% in September, driven by a record 34.1% year-on-year jump in jewellery prices. “Wholesale inflation was flat at 0.02% in the second quarter of FY26, reaching an eight-quarter low,” he said, adding that this, along with record-low retail inflation, could put pressure on corporate margins.Jasrai added that a favourable base effect might push WPI back into deflation in October, estimating a reading of around –0.5%. “The near-term inflation trajectory is expected to remain weak, with some pickup anticipated by the end of FY26,” he said. “There is potential for another round of 25 basis point cuts in the repo rate, though much will depend on incremental data, including GST impacts.”PHD Chamber of Commerce and Industry (PHDCCI) CEO and Secretary General Ranjeet Mehta said the moderation in wholesale prices was mainly due to lower food and energy costs, a strong agricultural output, and stable global commodity prices.“Looking ahead, wholesale inflation is expected to remain benign, supported by adequate food supply, stable global commodity prices, and government measures to control inflation in key sectors,” Mehta said. “The harvest of kharif crops and the arrival of rabi produce are likely to keep food inflation contained.”The Reserve Bank of India, which focuses on retail inflation for policy decisions, kept benchmark rates unchanged at 5.5% earlier this month. Retail inflation fell to an eight-year low of 1.5% in September, official data released on Monday showed.