WPI Plunges to -1.21% in October, Driven Deep into Deflation by Falling Food and Energy Prices
SDG 9: Industry, Innovation, and Infrastructure | SDG 12: Responsible Consumption and Production
Institutions: Ministry of Commerce & Industry | Department for Promotion of Industry and Internal Trade (DPIIT)
The provisional annual rate of inflation based on the All India Wholesale Price Index (WPI) number for October 2025 is (-) 1.21%. This negative rate, representing a sharp deceleration from the 0.13% inflation recorded in September 2025, is primarily due to a substantial decrease in the prices of food articles, crude petroleum & natural gas, electricity, mineral oils, and manufactured basic metals.
The deflationary trend is severe in primary goods, while manufactured goods remain inflationary:
Primary Articles (Weight 22.62%): The inflation rate plunged to (-) 6.18% in October, down from (-) 3.32% in September. This group saw price decreases in Crude Petroleum & Natural Gas (YoY: -7.54%) and Food Articles (YoY: -8.31%).
WPI Food Index (Weight 24.38%): The Food Index inflation decreased significantly to (-) 5.04% in October, compared to (-) 1.99% in September, with vegetable prices seeing a particularly steep year-on-year drop of -34.97%.
Manufactured Products (Weight 64.23%): This major group remained in positive inflation territory at 1.54% (down from 2.33% in September).
The Wholesale Price Index (WPI) and the Consumer Price Index (CPI) in October 2025 tell a complementary story about the health of the Indian economy: cost pressures for producers are collapsing, leading to stable prices for consumers.
The WPI signals a severe cost-push deflation at -1.21%, driven by the dropping prices of raw materials, fuel, and primary food articles. This negative reading indicates that the costs faced by manufacturers are rapidly vanishing. In contrast, the CPIβwhich tracks the prices consumers pay, including services (like healthcare, education, and transport), retail margins, and taxesβonly saw near-zero inflation at 0.25%. The core takeaway is that the deep deflation at the wholesale level is successfully preventing retail price increases (confirmed by the -5.02% food deflation in the CPI). However, the continued positive reading of the CPI, despite WPI being negative, shows that sticky costs in the labor-intensive services sector and retail margins are preventing the final retail price from falling into deflationary territory.
The substantial WPI deflation is critical for monetary policy, as it indicates that inflation is likely to be transitory and not structural. The government must ensure this deflationary pressure translates into lower retail prices, boosting consumption.
What is the distinction between the WPI and the CPI, and why do their rates differ?β The Wholesale Price Index (WPI) measures the average change in prices of goods sold in bulk by wholesale businesses. In contrast, the Consumer Price Index (CPI) measures changes in prices paid by the end-consumer (retail level). The rates often differ because the WPI primarily tracks goods and excludes services, reflecting the pressure on producers and traders, while the CPI reflects household expenditure and includes margins, taxes, and services.
Follow the full update here: Index Numbers of Wholesale Price in India for the Month of October, 2025 (Base Year: 2011-12)