Wholesale inflation drops to 1.9% in November as food prices cool

India's wholesale price inflation slowed to 1.9% in November as food prices moderated, official data released Monday showed.

The Wholesale Price Index-based inflation was 2.4% in October. A year earlier, it was 0.4%.

On an average, wholesale inflation accelerated to 2.1% in fiscal 2024-25 till November, compared with a contraction of 1.3% in the corresponding period last year.


Easing of the wholesale inflation comes alongside a reduction in retail inflation, which slowed to 5.5% in November from a 14-month high of 6.2% in October. Food inflation also slowed to 9% from a 15-month high of 10.9%, according to official data released last week.

The Reserve Bank of India kept the policy rate unchanged in the December monetary policy review for the eleventh consecutive time.

"Our tracker indicates that we are likely to approach the 4% (retail inflation) target by March 2025. As a result, we expect the Monetary Policy Committee (MPC) to reduce the policy repo rate by 25 basis points in its February meeting," Barclays India chief economist Aastha Gudwani said.

The future policy rate action would be data dependent but moderating food inflation along with a convincing fiscal arithmetic of union budget 2025-26 provides elbow room for a shallow rate cut in the February 2025 monetary policy, said Paras Jasrai, senior economic analyst at India Ratings and Research (Ind-Ra). Inflation in manufactured goods, which have a 64.23% weight in the WPI, accelerated 2%. Among manufactured products, vegetable and animal oils and fats recorded the fastest increase at 28%, followed by manufactured food products (9.4%). Fuel and power recorded a deceleration of 5.8%, while inflation in primary articles accelerated to 5.5%.

The WPI core, or non-food manufacturing, inflation accelerated to 0.5% from 0.3% in October, but remained below 1% for the fourth consecutive month.

"The core inflation prints have largely remained subdued, averaging at just 0.4% during April-November, which along with the benign prints in primary non-food articles and crude petroleum and natural gas, has contained the uptick in the headline WPI inflation during this period, despite elevated food inflation," said ICRA senior economist Rahul Agrawal.

The WPI Food Index inflation slowed to 8.9% from 11.6% in October, as prices of vegetables and fruits eased to 28.6% and 8.4%, respectively.

While potato prices were up 82.8%, onion prices rose 2.9%.

WPI inflation is likely to pick up in December on account of rising global commodity prices.