India's WPI Inflation Drops to 2.05% in March

Synopsis

India's inflation rate based on the Wholesale Price Index (WPI) decreased to 2.05% in March from 2.38% in February, as reported by the Ministry of Commerce and Industry. The decline is attributed to lower prices in food and fuel, contributing to a negative month-on-month inflation rate.

Key Takeaways

India's WPI inflation is at 2.05% for March.
Decrease from 2.38% in February.
Manufactured product prices influenced inflation.
Retail inflation is also declining.
RBI projects CPI inflation at 4% for 2025-26.

New Delhi, April 15 (NationPress) The annual inflation rate in India, determined by the Wholesale Price Index (WPI), has decreased to 2.05 percent in March, a drop from 2.38 percent in February, as reported by the Ministry of Commerce and Industry on Tuesday.

This positive inflation rate for March is mainly due to a rise in manufactured product prices, as indicated by the data.

The month-over-month WPI change for March was recorded at a negative (-0.19 percent) compared to February, indicating a downward trend in inflation. Notably, there was a decrease in prices for both food and fuel and power groups compared to the previous month, leading to an overall negative monthly inflation rate.

At the same time, retail inflation has also shown a declining trend. The Reserve Bank's Monetary Policy Committee has revised its inflation forecast for 2025-26 to 4 percent from an earlier estimate of 4.2 percent, citing a “decisively positive” outlook for food inflation, as stated by RBI Governor Sanjay Malhotra last week.

“Headline inflation has moderated during January-February 2025 following a significant correction in food inflation. The outlook for food inflation has turned decisively positive. The uncertainties surrounding rabi crops have significantly decreased, and the second advance estimates indicate a record wheat production along with higher production of key pulses compared to last year,” remarked the RBI Governor.

He noted that with strong kharif arrivals, this scenario is expected to pave the way for a sustained decline in food inflation.

“The notable drop in inflation expectations from our latest survey for three months and one year ahead will also assist in stabilizing inflation expectations moving forward,” he added.

Additionally, the decline in crude oil prices is favorable for the inflation outlook. However, concerns regarding ongoing global market uncertainties and potential adverse weather-related supply disruptions continue to pose upward risks to the inflation trajectory, the RBI Governor mentioned.

He concluded that considering all these factors and assuming a normal monsoon, the CPI inflation for the financial year 2025-26 is projected at 4.0 percent, with Q1 at 3.6 percent; Q2 at 3.9 percent; Q3 at 3.8 percent; and Q4 at 4.4 percent. He also indicated that the risks are evenly balanced.