Wholesale inflation in country likely declined to 2-year low to -0.45% in July: UBI Report

Wholesale inflation in India likely fell to a near two-year low in July 2025, driven by a sharp drop in food and fuel prices, according to a report by Union Bank of India.

The Wholesale Price Index (WPI) is estimated to have declined to -0.45 per cent year-on-year (y/y) in July, compared to -0.13 per cent in June, marking the lowest level in almost two years.

The report stated "July'25 WPI y/y likely fell to almost 2 years' low of -0.45 per cent".


The report noted that this fall in WPI mirrors the trend in retail inflation (CPI), with both food and fuel sub-segments slipping further into deflation territory during the month. However, core WPI, which excludes food and fuel, showed improvement, rising to 1.50 per cent in July from 1.06 per cent in June.

As per report, food inflation in the wholesale market recorded a significant correction, falling to -1.72 per cent y/y in July from -0.26 per cent in June. Fuel inflation also stayed in the contraction zone, shrinking further to -4.90 per cent from -4.23 per cent in June.

The decline has been partly attributed to base effects, as sequentially, all sub-segments have registered an uptick compared to the previous month.

Within the food category, m/m inflation increased in milk, sugar, other manufactured food items, and eggs, fish and meat.

In contrast, cereals, pulses, fruits, spices, oils, and other food articles likely remained in deflation. Notably, y/y inflation in pulses has been in the negative zone since February 2025.

Looking ahead, the report cautioned that global commodity prices may remain volatile due to uncertainties from additional US trade tariffs and ongoing geopolitical conflicts. However, weak demand and adequate supply could limit any sharp upward movement in prices.

Domestically, monsoon patterns and potential weather-related disruptions remain key factors to watch, as they could impact the supply chain and influence WPI in the short term.

The report suggested that while inflationary pressures from global markets are possible, domestic conditions will play a crucial role in determining the wholesale inflation trend in the coming months.