New Delhi
The steady decline in Wholesale Price Index (WPI) inflation for the seventh consecutive month is seen as a positive sign for India’s economy, as it reduces business costs and encourages demand-led growth, experts said on Monday.
Hemant Jain, President of PHDCCI, said the fall in wholesale inflation since December 2024 reflects improving economic fundamentals. WPI dropped from 2.57% in December to (-) 0.13% in June 2025, boosting business sentiment across sectors.
Jain highlighted that lower input costs will help companies manage expenses better and support consumption-driven growth. He added that rising domestic demand, normal monsoon expectations, and strong economic activity suggest WPI inflation will likely stay moderate, despite global uncertainties.
According to the Commerce Ministry, the drop in June’s WPI was mainly due to lower prices of food items, crude oil, mineral oils, metals, and natural gas. Primary article inflation fell sharply from -2.02% in May to -3.38% in June. Fuel and power inflation declined from -2.27% to -2.65%, and manufactured products from 2.04% to 1.97%.
Food inflation, which directly impacts households, saw a notable fall—from 5.83% in January to (-)3.75% in June—due to reduced prices of cereals, vegetables, fruits, eggs, milk, meat, and fish.
Rahul Agrawal, senior economist at ICRA, noted that the seasonal rise in food prices has remained modest in July so far. He said unless vegetable prices rise sharply, food inflation may stay in the negative. A fall in global crude oil prices and a stable rupee are also expected to help keep WPI in deflation through July 2025.