India’s Wholesale Inflation Eases To 0.13% in September

India’s inflation trends show easing price pressures, raising the expectations for a potential RBI rate cut in December.

Wholesale inflation in India eased to 0.13% in September, compared to 0.52% last month. According to an official press release by the government, the positive inflation rate was primarily driven by rising prices in manufactured food products, other manufactured goods, non-food items, textiles, and transport equipment.

WPI Food Index inflation was negative, at -1.99% in September, compared to 0.21% in August.

Inflation Breakdown

The wholesale inflation for the Primary Articles category came in at -3.32% in September, from -2.10% in the previous month. 

Within this, food articles inflation (-5.22%), including pulses, cereals and vegetables, eased compared to the previous month. Non-food articles prices also fell to 3.14% from 5.56% in August. In contrast, the price of fuel and power edged slightly higher to -2.58% from -3.17%.

And in the manufactured products category, inflation was 2.33% compared to 2.55% in August.

Retail Inflation Falls To 8-year Lows

India’s annual retail inflation fell to 1.54% in September from 2.07 % in August, and marked the lowest year-on-year inflation since June 2017. A drop in food inflation boosted it.

Earlier this month, the Reserve Bank of India (RBI) revised the FY26 CPI inflation forecast lower to 2.6% from 3.1%. The central bank cited the impact of the GST reform and a more-than-expected decline in food prices as the primary reasons for the revision.

Analysts at JM Financial expect inflation to average below 2.5% in FY26, opening up the room for rate cuts by the RBI in its December policy. The next MPC meeting for 2025 is scheduled for December 3-5. 

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