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India’s Wholesale Price Index (WPI)-based inflation stood at 2.31% in January 2025, marking a slight decline from 2.37% in December 2024, according to data released by the Ministry of Commerce and Industry on Friday.
Wholesale Price Inflation in India rose to 2.37% in December, marking a six-month high and an increase from November’s 1.89%. The December figure also surpassed October’s inflation rate of 2.36%, which had breached the inflation target set by the Reserve Bank of India (RBI).
A significant shift was observed in the manufacturing sector, which recorded a year-on-year (Y-o-Y) growth rate of 2.51%, a notable recovery from -1.20% in January 2024. This resurgence in manufacturing is largely attributed to the government’s continued emphasis on domestic production, as outlined in the recently announced Union Budget.Key sectors driving this growth included food products, machinery and equipment, pharmaceuticals, and botanical products. However, some industries experienced a decline in prices, notably basic metals, fabricated metal products (excluding machinery and equipment), wearing apparel, beverages, and other transport equipment compared to December 2024.
Primary Articles and Food Index Trends
The primary articles category saw an annual inflation rate of 4.69%, rising from 4.07% in January 2024. Meanwhile, the Food Index, which includes food articles from the primary articles group and food products from the manufacturing sector, declined from 195.9 in December 2024 to 191.4 in January 2025. As a result, the annual WPI Food Index inflation eased from 8.89% in December 2024 to 7.47% in January 2025.These trends indicate a complex but encouraging outlook for India’s inflationary landscape, with manufacturing witnessing a rebound while food prices show signs of moderation.
Wholesale inflation tracks the changes in prices at the wholesale level, before goods reach the consumer, it reflects the average price change in goods sold in bulk, including food, fuel, and manufactured products.
Unlike retail inflation, which captures the price changes felt by consumers, wholesale inflation provides insight into cost trends impacting producers and distributors.
A sharp rise in wholesale prices can indicate supply chain disruptions or increasing production costs, while a decline may suggest reduced demand or stability in supply.
Movement of WPI so far in FY25:
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