New Delhi: Wholesale inflation in India is expected to decline to a near two-year low in July 2025, a report released by Union Bank of India stated. The
likely drop is attributed to a sharp decrease in food and fuel prices.
The Wholesale Price Index (WPI) is likely to have dropped to -0.45 per cent year-on-year (y/y) in July 2025, while it stood at -0.13 per cent in June 2025, marking the lowest level in almost two years.
As per the report, Food WPI corrected sharply to -1.72% y/y from -0.26% in June while core WPI strengthened from 1.06% in June to 1.50% in July. The Fuel WPI too remained in the contraction zone, likely shrinking to -4.90% from -4.23% in June. Core WPI which reflects inflation excluding food and fuel, has gone up from 1.06% last month to 1.50% in July, the bank said in its report.
Union Bank of India’s report on Wholesale Price Index
Food WPI though has fallen y/y from -0.26% in June to -1.72% in July, m/m food WPI has likely gone up from 0.36% in June to 1.02% in July. The spike has been primarily led by some momentum gained in wholesale food prices across segments. M/m vegetables inflation in July is seen at 10.2%, after an 11-month high of 18.29% was recorded last month. Within food segment, m/m inflation in milk, sugar, other manufactured foods and eggs, fish & meat is seen up; while segments like cereals, pulses, fruits, spices, oils and other food articles likely continued to be in deflation. In specific, y/y inflation in pulses has been in negative zone since Feb’25.
Y/y Fuel WPI likely continued the slide for the 12th month in line in July’25 partly due to fall in inflation in crude & mineral oils segment and partly due to high base effect (3.01% in July’24) even as crude oil prices were up by ~9% m/m in July. This has led to a likely fall in y/y Fuel WPI from -4.23% in June to 4.90% in July.
Core WPI which reflects inflation excluding food and fuel, has gone up from 1.06% last month to 1.50% in July. While all sub segments have seen near flat momentum in recent months, metals are a key mover and we see an uptick in July tracking global prices. We estimate that m/m core WPI has also gone up from 0.05% in June to 0.34% this month. Core WPI includes price movements in non-food manufactured products which closely track commodity prices as more than 40% manufacturing raw materials are imported.
