India’s Wholesale Price Index (WPI) inflation recorded its first negative print in 19 months, hitting −0.13% year-on-year in June 2025, compared to +0.39% in May. This sudden shift reflects softer prices across food, fuel, and manufacturing sectors
📉 5 Highlights Behind the Drop
1️⃣ Massive vegetable price deflation
Vegetable inflation plummeted 22.65% YoY, deepening from May’s −21.62% decline, as abundant supply alleviated monsoon-linked pressures
2️⃣ Food & primary articles easing
Food articles saw deflation of 0.26% YoY, reversing May’s +1.72% rise. Overall, primary (agri) articles dropped 3.38%
3️⃣ Fuel & power deflation
Fuel and power costs fell by 2.52% YoY—the first decline since May, countering a 0.69% increase last month
4️⃣ Manufactured goods prices stabilize
Manufactured product inflation eased to +1.97% from +2.04% in May, signaling moderating industrial input costs
5️⃣ Downward pressure on input costs
The broad deflation indicates relief in input costs, potentially easing retail inflation and giving the RBI more flexibility in monetary policy
🔭 What This Means for the Economy
- Retail inflation may soften soon, aligning with June CPI forecasts around 2.5%—a six-year low
- Monetary policy flexibility improves: easing WPI supports recent RBI rate cuts and may fuel expectations of further easing.
- Producer relief: Lower wholesale prices reduce input costs for industries, possibly aiding margin recovery.
- Watch commodity trends: Any global supply shocks or monsoon variability could reverse the trend quickly.
Economist Rahul Agrawal of ICRA noted the return to deflation was “surprising” and likely driven by food prices, with expectations for negative WPI to linger into July NDTV Profit
✅ Bottom Line
India’s June WPI reading of −0.13% marks a notable shift after 19 months of inflation—highlighting significant deflation in vegetables, fuel, and food. This easing could temper retail inflation, reset corporate cost pressures, and bolster central bank rate flexibility. However, ongoing commodity and weather risks warrant continuous monitoring.
