India’s Wholesale Price Index (WPI) inflation fell sharply to 0.85% year-on-year in April 2025, compared to 2.05% in March, offering a sigh of relief to businesses grappling with cost pressures over the past year. This was the lowest reading in six months, and more importantly, suggests that the inflation cycle is clearly moderating.
Key Sectoral Breakdown:
Food Inflation: Slowed significantly to 2.55% from 4.66% in March. Key items like vegetables, cereals, and pulses saw prices decline due to improved supply and seasonal harvests.
Manufactured Products Inflation: Fell to 2.62% from 3.07%, indicating that core inflation (non-food, non-fuel) is also under control. This is especially important for producers in FMCG, consumer durables, and industrial goods sectors.
Fuel & Power Inflation: Turned negative at -2.18%, compared to a marginal rise of 0.20% in March. Declining prices of crude oil, diesel, and LPG were major contributors.
Why It Matters:
For investors, the WPI drop could signal improved corporate margins in the quarters ahead. For the RBI, this trend provides headroom to maintain or even ease interest rates if retail inflation follows suit.
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