According to data released by the Ministry of Commerce and Industry on Monday, wholesale price index (WPI)-linked inflation increased to 0.52 percent in August, up from -0.58% in July.

The August inflation rate was positive due to price increases in food products, manufacturing, non-food articles, nonmetallic mineral products, and transportation equipment.

Aided by an unfavourable base effect, the WPI expectedly reverted to an inflation in August 2025 after a gap of two months, printing at 0.5%, in line with ICRA’s forecast for the month. The hardening was broad based across all segments, except fuel and power which witnessed a deeper deflation in August 2025 as compared to July 2025.

Key Highlights

• India’s wholesale inflation rebounded to 0.52% YoY in August, reversing July’s -0.58% contraction. 
• Food and manufactured goods drove inflation rise; fuel and power costs continued declining year-on-year.

WPI Food Index

The index for primary articles increased by 1.60 percent to 191.0 in August 2025, up from 188.0 in July. Prices for non-food items rose 2.92 percent in August, followed by minerals (2.66%) and food items (1.45%). However, crude petroleum and natural gas inflation was 0.43 percent in August, compared to the same period last month.

Food items accounted for as much as 73 bps of the 110 bps uptick in the headline WPI print between August 2025 and July 2025. This was followed by core WPI (non-food manufactured items) which added 27 bps to the headline print, with the inflation in the same rising to a 5-month high of 1.6% in August 2025.

Fuel and Power

Fuel and power inflation fell by 0.69 percent to 143.6 in August, from 144.6 the previous month. Prices for electricity and mineral oils remained negative at 2.91 percent and 0.07 percent, respectively. Meanwhile, coal prices remained unchanged from July.

Also Read: India's July WPI Inflation Likely to Hit 2-Year Low Amid Falling Food Prices

Manufactured products

Manufactured products, the largest component of the WPI basket, increased by 0.21 percent in August compared to the same period last month. Food product, textile, electrical, other transportation, and machinery and equipment manufacturers reported price increases.

Meanwhile, prices for basic metals, computers, electronics, optical products, clothing, wood and wood products, and furniture fell during the same time period.

CPI inflation increased to 2.07% in August

While the expectations of a relatively more favourable CPI inflation trajectory following the GST rationalisation opens up space for a rate cut by the MPC, the positive impact of the same on growth outcomes in H2 FY2026, along with the stronger-than-expected GDP growth in Q1 is likely to result in a status quo in the upcoming October 2025 review meeting."

Meanwhile, India's retail inflation, as measured by the Consumer Price Index (CPI), increased to 2.07% in August from 1.61 percent in July, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday.

ICRA expects the headline WPI to rise further to a 6-month high of ~0.9% in September 2025, led by a hardening in the YoY prints for global crude oil and commodity prices, as well as the depreciation in the USD/INR pair, even as an elevated base would likely pull down the food index back to the deflationary territory in the month.