Wholesale inflation slipped to around 2% in March

Producers’ inflation, as measured by the Wholesale Price Index (WPI), declined to approximately 2% in March 2025, down from 2.38% in February, but still above the 0.26% recorded in March 2024

Producers’ inflation based on the Wholesale Price Index (WPI) dropped to around 2 per cent in March as against 2.38 per cent in February, the government reported on Tuesday. However, it is much higher than 0.26 per cent in March 2024.

“Positive rate of inflation in March, 2025 is primarily due to increase in prices of manufacture of food products, other manufacturing, food articles, electricity and manufacture of textiles etc,” a statement by Commerce & Industry Ministry said.

As per the WPI data, food inflation eased to 1.57 per cent in March from 3.38 per cent in February, with vegetables seeing a sharp drop. Deflation in vegetables was 15.88 per cent during the month, compared to 5.80 per cent in February. Inflation in manufactured products, however, saw a spike at 3.07 per cent in March, compared to 2.86 per cent in February. Fuel and power, too, saw an uptick, with the rate of inflation at 0.20 per cent in March, as against a deflation of 0.71 per cent in February.

Aditi Nayar, Chief Economist with ICRA Ltd, said that the dip in the headline number was largely led by food items, with the WPI-food inflation cooling to a seven-month low of 4.7 per cent from 5.9 per cent in the previous month amid a deeper deflation in vegetables and pulses. Among the non-food items, the deflation in crude petroleum and natural gas widened in March 2025 compared to the previous month, while the inflation in non-food primary articles also softened between these months, exerting downward pressure on the headline print. However, the core (non-food manufacturing) WPI inflation increased to a 25-month high of 1.5 per cent from 1.3 per cent in February 2025.

“Given the sequential softening in prices of most essential commodities in early-April 2025 and a favourable base, ICRA expects the WPI-food inflation to ease further to 3-3.5 per cent in April (+6.1% in April 2024) from 4.7 per cent in March 2025,” Nayar said.  However, higher-than-normal temperatures pose an upside risk to the food inflation trajectory in the second half of the month. In contrast, the sharp fall in global crude oil prices in April 2025 vis-à-vis March 2025 is likely to exert downward pressure on the WPI print for the ongoing month, she added.

Published on April 15, 2025