India’s wholesale price index (WPI) inflation remained in the negative zone for the second consecutive month, with the rate recorded at (-)0.58% in July 2025. This marks a deeper fall compared to June 2025, when WPI inflation stood at (-)0.13%, and is significantly lower than July 2024, when inflation was at 2.10%.

What the latest numbers show

The decline in WPI inflation is an indicator of deflationary pressure at the wholesale level. Economists highlight that the fall is largely driven by the easing of commodity prices, particularly in fuel, power, primary articles, and some categories of manufactured products.

A deeper look suggests that falling costs of crude oil, metals, and food commodities have contributed significantly to the dip. The contraction in wholesale prices comes at a time when retail inflation (CPI) is showing a different trend, thereby widening the gap between wholesale and consumer-level inflation data.

Year-on-year comparison

The sharp contrast between this year and last year is evident. In July 2024, WPI inflation stood at 2.10%, while within just a year, the trend has reversed into negative territory. This indicates how global commodity corrections and domestic supply factors have affected wholesale prices.

The sequential dip from (-)0.13% in June to (-)0.58% in July 2025 also signals that deflationary trends may persist for some more months if global prices remain soft.

Implications for the economy

While negative WPI inflation eases cost pressures for businesses, it can also be a sign of weak demand and lower pricing power for producers. For policymakers, especially the Reserve Bank of India (RBI), the divergence between WPI and CPI will be critical in framing decisions on interest rates and inflation management.

Experts suggest that a prolonged phase of negative WPI could benefit industries dependent on raw materials, but at the same time, it could also squeeze profit margins for producers if consumer demand does not keep pace.

Government’s view and outlook

Government officials are likely to monitor this closely, as India’s broader economy continues to show signs of growth but also faces risks from global uncertainty, oil price volatility, and currency movements.

For now, the negative WPI is seen as a short-term relief on input costs, but policymakers will be cautious about its long-term impact on investment, production, and jobs.

Conclusion

India’s wholesale inflation slipping into the negative for the second straight month underlines the evolving nature of price dynamics in the economy. While it provides relief from cost pressures, it also raises questions about sustained demand and industrial growth.

The coming months will determine whether WPI inflation remains subdued or picks up again in line with any global commodity price rebound.

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