India’s Wholesale Inflation Hits Bottom, May Stay Negative Through 2025-26: Union Bank Report

New Delhi: India’s Wholesale Price Index (WPI), which measures wholesale inflation, has now “bottomed out” and is expected to pick up slightly from November. However, it may still stay in negative territory for most of the remaining months of 2025-26, according to a report released by Union Bank of India.

The Bank’s projection for WPI in 2025-26 remains below 0.35 per cent, mainly because global commodity prices have stayed soft and food prices have declined due to seasonal factors. The report also noted that the effect of floods on food inflation has remained limited.

Why did food inflation stay low?

The report explained that food WPI continues to stay weak. The widespread flooding and supply-chain issues that were expected earlier did not take place in a major way. As a result, food prices stayed under control. At the same time, Union Bank of India’s estimates for the Consumer Price Index (CPI) for 2025-26 also remain much lower than the Reserve Bank of India’s latest projections. Because of this softer inflation outlook, the Bank expects the RBI to announce a 25 basis point cut in the repo rate in the December monetary policy review.

How will India’s GDP be affected?

Although India’s real GDP growth continues to show strong momentum, the report said that nominal GDP growth may face pressure. This is mainly due to the lower projections for both CPI and WPI for 2025-26. In October, India’s wholesale inflation turned negative, with WPI falling by (-) 1.21 per cent compared to the same month last year, as per data from the Ministry of Commerce and Industry. Prices dropped mainly because of lower costs of food items, crude petroleum, natural gas, electricity, mineral oils, and basic metals. The Ministry also mentioned that the month-on-month WPI change for October stood at (-) 0.06 per cent compared to September 2025.

How does the government track wholesale prices?

The wholesale price index is released every month on the 14th, or the next working day if it is a holiday. It is issued with a two-week delay and is prepared using data from various institutional sources and selected manufacturing units across India.

Has India managed inflation better than other countries?

While inflation remains a major concern globally, including in advanced economies, India has largely kept its inflation path under control. Before the rate cut in February 2025, the RBI had maintained the repo rate at 6.5 per cent for eleven straight policy meetings.