​India's Wholesale Inflation Eases to 2.05% in March, Lowest in Six Months

India's wholesale price inflation (WPI) fell to 2.05% in March 2025, a drop from the 2.38% level seen in February. This is noted to be the lowest in the last six months, according to the data published by the Ministry of Commerce and Industry on Tuesday. The decline is primarily due to moderated food prices combined with an insignificant increase in fuel and power.

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Key Sectoral Trends

The Wholesale Price Index, which tracks prices at the wholesale level, showed notable changes across various sectors:​

Food Inflation: The WPI Food Index, which measures food articles and manufactured food products, recorded a decline, decreasing from 5.94% in February to 4.66% in March. The inflation declined due to reduced vegetable prices and other primary food items. 

Fuel and Power: The fuel and power component recovered, with inflation turning positive at 0.20% in March, up from -0.71% in February. Marginal increases in the prices of electricity and mineral oils contributed to this turnaround. ​

Manufactured Products: The inflation rate for manufactured products marginally increased in March to 3.07%, up from 2.86% in February. Rising costs in manufacturing industries like textiles and food products caused this increase. 

Primary Articles: Inflations for primary articles, which include items like crude petroleum and natural gas, eased to 0.76% in March 2025 from 2.81% in February, suggesting a softening in raw material prices. ​

Economic Implications

Another indication of price pressures easing at the wholesale level, with possible downstream effects on consumer prices, is the moderation in wholesale price inflation. Economists forecast a WPI inflation rate of 2.5% for the month of March, but actual figures came in lower, hinting at a larger-than-anticipated easing. ​

This trend might give the Reserve Bank of India more room to manoeuvre in decisions under its monetary policy. With inflation continuing to stay within the target range of 2-6% prescribed by the RBI, the central bank can now afford to either keep or alter interest rates in connection with economic growth. Uneven rainfall and increasing temperatures are likely to impact food prices in the months ahead, thereby giving an indication of future inflation paths. ​

Outlook

However, declining wholesale inflation to a six-month low is a pleasant phenomenon for the Indian economy, signalling that prices in key sectors are stabilizing. To determine if this inflation is sustainable, a close eye will need to be kept on how each sector behaves, particularly regarding food and fuel. The next few months will determine if this trend continues or whether external factors will push up inflation, as has been seen recently with weather patterns and global commodities.