India's wholesale inflation drops sharply to 0.85% in April on fuel prices

April 2025 WPI-based inflation: Oil prices fell by 3.95%, electricity prices dropped by 1.38%, while coal prices rose slightly by 0.22%

India’s wholesale price index (WPI)-based inflation fell sharply to 0.85 per cent in April 2025 from 2.05 per cent in March, according to data released by the Ministry of Commerce and Industry on Wednesday. The decline in inflation was largely due to a decline in prices in the fuel & power and primary articles segments, although the manufacturing sector continued to show resilience.

 

The WPI tracks the average change in prices of goods sold in large quantities and is an important indicator of inflation at the production level. It shows trends in supply and demand across sectors like agriculture, mining, and manufacturing.

 

In April, prices in the primary articles group, which makes up 22.62 per cent of the WPI, fell by 0.11 per cent compared to March. Over the past year, this group saw a price drop of 1.44 per cent. 

Some key changes include a sharp fall in crude petroleum and natural gas prices by 5.31 per cent, and non-food article prices dropped by 1.78 per cent. In contrast, food article prices rose by 0.36 per cent, and mineral prices increased sharply by 7.81 per cent.

 

WPI Food Index

The WPI Food Index, which includes both primary food articles and manufactured food products, slightly increased in April to 189.3 from 188.8 in March. Even though prices rose compared to the previous month, the yearly food inflation rate went down to 2.55 per cent in April from 4.66 per cent in March.

 

Fuel and power

In April, the prices in the fuel and power sector dropped sharply by 2.82 per cent compared to March. The index, which measures these prices, fell from 152.4 in March to 148.1 in April. This drop was mainly because mineral oil prices went down by 3.95 per cent and electricity prices fell by 1.38 per cent. 

 

Coal prices, on the other hand, went up slightly by 0.22 per cent. Compared to the same time last year, prices in this sector were 2.18 per cent lower, showing an overall decrease over the year.

 

Manufacturing sector

The WPI for manufactured products, which make up the largest part of the index at 64.23 per cent, went up by 0.35 per cent in April compared to March. However, the annual inflation rate for this category slowed slightly to 2.62 per cent in April, down from 3.07 per cent in March. 

The rise in prices was mainly due to increases in basic metals, chemicals, food products, transport equipment, and machinery. On the other hand, prices fell in areas like textiles, pharmaceuticals, paper products, and clothing.

 

April retail inflation touches 5-year low

India’s retail inflation fell to its lowest level since July 2019, with the Consumer Price Index (CPI) for April 2025 recorded at 3.16 per cent year-on-year, government data released on Tuesday showed. The decline was largely driven by lower food prices, supported by a strong harvest despite severe heatwaves. Key contributors to the fall in food inflation included vegetables, pulses, fruits, meat and fish, cereals, and personal care items. 

 

What is the 2025 inflation forecast in India?

At its April bi-monthly policy meeting, the Reserve Bank of India (RBI) projected CPI-based inflation for the current financial year (FY26) at 4 per cent, assuming normal monsoon conditions. For the April–June quarter, inflation is expected to ease further to 3.6 per cent, a significant downward revision from the earlier estimate of 4.5 per cent.

 

RBI's quarter-wise inflation forecasts for FY26 are:

 

FY26 Q1: 3.6 per cent

FY26 Q2: 3.9 per cent

FY26 Q3: 3.8 per cent

FY26 Q4: 4.4 per cent  WPI data for May 2025 will be released on June 16, 2025.