India's wholesale inflation rate eases to 14-month low of 0.39% in May as kitchen prices offer relief

India’s wholesale inflation eased further to a 14-month low of 0.39% in May on an annual basis as against 0.85% in April, government data released on Monday showed. The trend is largely driven by falling prices of key kitchen staples such as vegetables, onions, and pulses.

As such, the wholesale food price growth rate eased to 1.72% in May from 2.55% in the previous month.

A Reuters poll had projected wholesale price index (WPI)-based inflation to likely slip to 0.80% in May, down slightly from 0.85% in April. The May wholesale inflation rate is the lowest since March 2024.


On a sequential basis, the wholesale price index-based inflation rate contracted to 0.06% from 0.19% in April.

Meanwhile, the inflation rate for manufactured products, which makes up over 60% of the wholesale inflation basket, grew at 2.04% in May.

Primary articles inflation in May contracted to 2.02% from a decline of 1.44% in May; whereas, inflation rate for fuel and power contracted 2.27% in May as against April's decline of 2.18%.

"The cooling was broad-based, with the food, non-food manufacturing, minerals, and fuel and power segments contributing to the dip in the headline print between these months," said Rahul Agrawal, Senior Economist at ICRA.

On the other hand, the country’s retail inflation eased to 2.82% in May, marking an over six-year low.

A look at wholesale inflation rate in India's kitchen

With inflation rate coming down, here's a look at India's kitchen:

Inflation rate for vegetable prices contracted 21.62% as compared to 18.26% in the previous month. Onion inflation in the month of May eased to 14.41% against April’s 0.20%, while potato inflation stood at (-)29.42% against the last month’s (-)6.77%.

Inflation rate for pulses fell to 10.41% as compared to to 5.57% in April and cereal prices in May stood at 2.56% after noting 3.81% in May.

Meanwhile, India’s retail inflation dropped to a 69-month low of 3.16% in April, down from 3.34% in March.

RBI’s inflation outlook

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), in its April meeting, noted a continued decline in inflation—driven largely by easing food prices—and projected further moderation in FY26, offering relief to households.

The MPC revised its inflation forecast for FY26 to 4%, down from 4.2% in its February estimate.

Quarter-wise, inflation is expected to average:

• Q1: 3.6%
• Q2: 3.9%
• Q3: 3.8%
• Q4: 4.4%

Risks by the central bank have been seen as broadly balanced.