On an year-on-year basis, food prices in the wholesale category again entered the deflationary zone and the index growth for primary articles and fuel also remained in the negative territory. As compared to the same month of the previous year, the food index was -1.99% down in September from a 0.21% growth in August.
The primary articles inflation was -3.32% during the month as compared to 2.10% in August. Fuel power inflation in September was -2.58% as compared to -3.17% in the previous month.
ALSO READSteel, auto stumbling blocks in trade talks with EU
“The deeper deflation in primary articles was primarily driven by a decline in food inflation, while the continued fall in global crude oil prices kept the fuel and power segment in deflation,” Chief Economist at CareEdge Ratings Rajani Sinha said.The index rose only in manufactured products which has weightage of 64.23% in the Wholesale Price Index . In September, the manufactured products inflation was 2.33%, slightly lower than 2.55% in August.
Retail inflation eased to an eight-year low of 1.54% in September, owing to a favourable base and an annual decline in prices of vegetables, pulses, cereals and fuels, the National Statistics Office (NSO) had said on Monday. The inflation rate fell well below the lower end of the Reserve Bank of India’s (RBI) tolerance band of 2%, increasing the chances of another rate cut in December. September retail inflation is the lowest since June 2017, when it stood at 1.46% implying the latest print is a 99-month low. In August 2025, the inflation stood at 2.07%.
ALSO READIndian team to visit US for trade talks this week
Within manufacturing products in WPI that showed month-on-month increase in prices included food products, electrical equipment, textiles and other non-metallic mineral products. Some groups that witnessed a decrease in prices were rubber and plastics products, motor vehicles, trailers and semi-trailers, pharmaceuticals, medicinal chemical and botanical products.
The core WPI inflation, however, inclined higher to 1.8% in September 2025 from nil in the same month last year, Economist at Bank of Baroda Sonal Badhan said. For April-September, the WPI inflation stood at 0.14%, down from 2.10% in the same period of the last financial year.
“Looking ahead, food inflation is expected to stay moderate, supported by healthy agricultural activity and a favourable base. Good monsoon progress, adequate reservoir levels, and strong kharif sowing bode well for food price stability,” Sinha said.
However, risks persist from the late withdrawal of the monsoon and heavy rains in certain regions, which could lead to crop damage. On the external front, global commodity prices are broadly expected to remain benign given the weak global growth prospects, overcapacity in China and Opec’s decision to raise crude oil output, Sinha added.
Additionally, the rationalisation of GST rates is expected to positively influence the overall inflation environment. For FY26, we project WPI inflation to average around 0.1%, according to CareEdge Ratings.