India’s Wholesale Inflation Cools to 14-Month Low of 0.39% - Here's What’s Getting Cheaper

India’s wholesale inflation, measured by the Wholesale Price Index (WPI), dropped sharply to 0.39% in May 2025, marking the lowest point in over a year.

This is a continued softening from 0.85% recorded in April 2025, largely attributed to easing prices in key food categories such as vegetables, pulses, and onions.

“The annual rate of inflation based on all India Wholesale Price Index (WPI) number is 0.39% (Provisional) for the month of May, 2025 (over May, 2024),” the press release stated.

This marks the third consecutive month of declining WPI-based inflation, and the lowest reading since March 2024, signalling that wholesale price pressures may be stabilising despite global uncertainty and domestic demand-side factors.

Vegetables, Pulses, Potatoes Among Biggest Price Droppers
The biggest driver behind this fall was the sharp contraction in food prices. The wholesale food price index grew by just 1.72% in May, compared to 2.55% in April.

Here’s what’s notably cheaper in May:
Vegetables: Prices plunged 21.62%, down from an 18.26% drop in April.
Potatoes: Inflation saw a deeper contraction at -29.42%, compared to -6.77% previously.
Onions: Prices surged 14.41%, up from a marginal 0.20%, indicating month-on-month volatility.
Pulses: Inflation eased to 10.41%, up from 5.57%, but remains elevated.
Cereals: Slowed to 2.56%, from 3.81% in April.

These sharp movements in staple categories directly impact kitchen budgets and bring temporary respite to consumers.

Fuel, Manufacturing Prices Stay Soft
Beyond food, inflation in fuel and power contracted 2.27% in May, slightly more than the 2.18% decline in April.

Primary articles, which include raw food items, saw inflation fall 2.02%, while inflation in manufactured products (which carry over 60% weight in the WPI basket) stood at a moderate 2.04%.

On a month-over-month basis, the WPI inflation contracted to 0.06%, compared to 0.19% in April.
 

Retail Inflation Trends Lower Too
India’s retail inflation (CPI) also reflected easing prices, falling to 2.82% in May, marking a 69-month low. This comes after a CPI of 3.16% in April and 3.34% in March, strengthening hopes that consumer prices may stay benign in the coming quarters.

RBI Sees Relief for Households Ahead
In its April policy meeting, the Reserve Bank of India’s Monetary Policy Committee (MPC) noted the downward momentum in prices and revised its FY26 inflation forecast to 4%, from 4.2% earlier.
The RBI projects quarterly inflation as follows:
Q1: 3.6%
Q2: 3.9%
Q3: 3.8%
Q4: 4.4%