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India’s wholesale inflation, measured by the Wholesale Price Index (WPI), eased to 2.05 percent in March 2025, driven by a significant decline in raw food article prices, according to data from the Ministry of Commerce & Industry. This marked a decline from 2.38 percent recorded in the previous month but a sharp increase compared to 0.26 percent in March 2024. Meanwhile, headline WPI inflation stood at 2 percent in March 2025, below the market estimate of 2.9 percent. This compares to 0.3 percent in March 2024 and 2.4 percent in February 2025.
Paras Jasrai, Associate Director at India Ratings and Research, explained: “Benign food inflation pulled wholesale inflation down to a six-month low of 2.05 percent in March 2025 from 2.4 percent in the previous month. The decline was slightly greater than our expectation of 2.2 percent. Additionally, a decline in energy and mineral prices (down 4.2 percent year-on-year, the steepest since October 2024) contributed to keeping wholesale inflation lower. However, the trend was not uniform, as core inflation and the fuel and power categories recorded an increase in March 2025.”
The positive rate of inflation in March 2025 was primarily attributed to rising prices in the manufacture of food products, other manufacturing, food articles, electricity, and textiles. For the financial year (FY) 2024–25, WPI inflation averaged 2.3 percent, a notable increase compared to (-) 0.7 percent in FY 2023–24.
“Looking ahead, as the trade war deepens, global growth prospects remain weak. This will exert downward pressure on oil and other commodity prices, which, in turn, will positively impact WPI inflation,” said Sonal Badhan, Economist at Bank of Baroda.
Stable food inflation
Food inflation remained broadly stable at 4.7 percent in March 2025 compared to 4.8 percent in March 2024. The vegetable inflation index fell sharply by (-)15.9 percent in March 2025, following a 20.1 percent rise in March 2024, driven by a higher base effect. This decline was led by decreases in the prices of potatoes, tomatoes, ginger, peas, and other vegetables. The onion price index also showed significant easing in March 2025 compared to the previous year.
While food inflation in March 2025 was steady compared to March 2024, fuel and manufactured product inflation edged higher. For the full financial year (FY) 2024–25, food inflation averaged 7.3 percent, up from 3.2 percent in FY 2023–24. Fuel inflation stood at (-)1.3 percent (versus -4.6 percent), manufactured product inflation rose to 1.7 percent (-1.7 percent), and core inflation increased to 0.7 percent (-1.4 percent). In March 2025, within the food category, inflation indices for vegetables, milk, cereals, and spices eased, while fruits experienced upward pressure. Wheat prices remained elevated.
Within the fuel category, the electricity index accelerated the most, while the mineral oil index declined at a slower pace. This trend reflects the combined impact of falling international oil prices and pressure on the domestic currency. For manufactured products, inflation was driven higher by textiles, basic metals (such as aluminum, copper, zinc, and lead), equipment (electrical and transport), and chemicals and pharmaceuticals.
The inflation index for fruits remained notably high at 20.8 percent, compared to (-)3.1 percent in March 2024. A comparison of cereal prices at the global level (based on the World Bank’s Pink Sheet) indicated that domestic trends closely followed international patterns. International paddy prices dropped sharply from a rise of 29.2 percent in March 2024 to (-)32.3 percent in March 2025, while the decline in wheat prices slowed from (-)23.1 percent to (-)4.1 percent over the same period.
Aditi Nayar, Chief Economist and Head of Research & Outreach at ICRA Ltd., stated, “The WPI inflation eased to 2.05 percent in March 2025 from 2.4 percent in February 2025, printing somewhat lower than ICRA’s expectations of 2.4 percent. The dip was largely driven by food items, with WPI-food inflation cooling to a seven-month low of 4.7 percent, compared to 5.9 percent in the previous month, amid deeper deflation in vegetables and pulses.”
Fuel and power inflation
Fuel and power inflation accelerated to 0.2 percent in March 2025, compared to (-)2.7 percent in March 2024 and (-)0.7 percent in February 2025. Among the subcategories, this trend was most pronounced in the electricity price index, which rose by 5.5 percent in March 2025 after a (-)2.6 percent decline in the corresponding month of the previous year. Meanwhile, the mineral oil index declined at a slower pace of (-)1.6 percent, compared to (-)3.5 percent in March 2024.
In contrast, coal prices fell marginally by (-)0.1 percent in March 2025 after increasing by 0.5 percent in March 2024. For mineral oils, international oil price trends showed a contrasting pattern. Brent crude prices fell by (-)15.6 percent year-on-year in March 2025, following a 6.9 percent rise in March 2024. This decline can partly be attributed to pressure on the domestic currency, which depreciated by (-)4.1 percent on average in March 2025, compared to (-)0.8 percent in March 2024.
Within the mineral oil subcategory, items that recorded price increases included petrol, high-speed diesel (HSD), and petroleum coke.
As of April 2025, Brent crude prices have fallen even more sharply, declining by (-)25.6 percent as the intensifying trade war further dampens demand prospects. Additionally, China’s domestic economy continues to show no signs of recovery. If this trend persists, it could help ease fuel inflation pressures in the coming months.
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
