India’s wholesale price inflation, as measured by the Wholesale Price Index (WPI), turned positive in December 2025 after two months of contraction, data released by the Ministry of Commerce and Industry showed. The year-on-year WPI inflation rose to 0.83 percent in December, reversing from a –0.32 percent decline recorded in November 2025. This turnaround reflects a broad-based increase in prices across several key segments of the economy.  

Key Highlights

• India’s wholesale inflation turned positive at 0.83% in December 2025 after two months of contraction.
• Rising manufactured goods, minerals, fuel prices lifted WPI, while food inflation mixed with declines vegetables.

The improvement in wholesale inflation was largely driven by rising costs in manufactured goods, minerals and machinery, as well as food products and textiles. Analysts had expected a more modest uptick, with many forecasting around a 0.30 per cent increase, but the actual figures surpassed these estimates, suggesting more persistent pricing pressures at the wholesale level.  

Among the major components of the WPI, the food index showed signs of stabilization, moving to flat growth in December after several months of decline. While prices of certain items like milk, eggs, meat and fruits increased, others such as vegetables, pulses and wheat continued to show year-on-year declines, with onion and potato prices falling sharply.

Other sectors also contributed to the inflationary shift. Primary articles—including farm produce and non-food items—saw price gains, while the fuel and power category registered higher costs due to increases in electricity, coal and mineral oil prices. In the manufacturing sector, prices rose in more than half of the surveyed product groups, including metals, chemicals and textiles.

The December WPI data contrasts with the deflation observed in October and November, when wholesale prices were declining partly due to lower food and energy costs. The recent turnaround indicates that some of the downward pressures on wholesale prices have eased, although overall inflation remains moderate compared with historical highs.  

In parallel, India’s retail inflation, measured by the Consumer Price Index (CPI), also showed an uptick in December 2025, reflecting broader price movements across the economy.

Also Read: Retail Inflation Rises to 3-month High of 1.3% in December

Commenting on the trend, rating agency ICRA said, “While the WPI expectedly reverted to an inflation of 0.8% in December 2025 after a gap of two months, the reading was mildly higher than ICRA’s expectations (+0.4%). The sequential hardening in the YoY WPI inflation was largely led by the WPI-food index, which was flat compared to year ago levels following the 2.6% contraction in November 2025. This contributed as much as 81 bps of the 115 bps uptick in the headline print between these months."

ICRA further noted; with this uptick, the gap between the CPI and the WPI inflation has narrowed to just 50 bps in December 2025 from 100 bps in November 2025

Notably, core WPI (non-food manufactured items) inflation rose to a 34-month high of 2.0% in December 2025 from 1.5% in the previous month. In sequential terms, the core index rose by 0.5% in December 2025, the steepest uptick in 19 months, reflecting hardening global commodity prices and the depreciation in the USD/INR pair over the past few months, which is likely to have put pressure on the landed cost of imports.

Looking ahead, ICRA expects the WPI-food inflation to harden further in January 2026 and continue on an upward trajectory thereafter owing to an unfavourable base. Besides, global commodity prices have continued to rise on a sequential basis in January 2026 led by sharp gains in precious metals, as well as some hardening in prices of some industrial metals, even though oil prices have cooled.

Led by the hardening in YoY food inflation owing to an unfavourable base, rise in global commodity prices, and sustained pressure on the USD/INR pair over the past few months, ICRA expects the YoY WPI inflation to rise to 1.5% in January 2026, the highest level in 10 months.

In Q4 FY2026, the WPI is projected to revert to an inflation of around 1.5-2.0%, after witnessing a 0.2% deflation in Q3 FY2026, which will push up the growth in the GDP deflator for the quarter.