India’s wholesale inflation slowed to its lowest level in four months in March, bringing some relief to producers and policymakers. The decline was largely driven by a moderation in food prices, particularly vegetables and cereals. According to data released by the Ministry of Commerce & Industry, wholesale inflation rose 2.05% year-on-year in March, compared to 2.38% in February, and was also below the 2.5% predicted by economists in a Reuters poll.
The wholesale price index (WPI) serves as a key measure of producer-level inflation, and this decline signals a softer price environment across multiple sectors. While food inflation remained elevated, its pace of growth eased significantly, contributing to the overall moderation in wholesale prices.
Food Prices Lead the Slowdown
Food items, which account for over 24% of the WPI basket, saw a notable cooldown in price pressures. Food inflation stood at 4.66% in March, down from 5.94% in February. Cereal prices increased by 5.49%, easing from a 6.77% rise in the previous month. Vegetables saw a sharper contraction, with prices dropping by 15.88%, compared to a 5.80% decline in February. Fruit prices, however, remained stubbornly high, rising 20.78%—only marginally down from the previous month.
Chief economist Aditi Nayar of ICRA noted that the food price dip pushed overall food inflation to a seven-month low. She projected a further fall to around 3–3.5% in April, supported by lower commodity prices and a favorable base. However, she warned that higher-than-normal temperatures could influence food inflation later in the month.
Manufacturing and Fuel Prices See Mild Changes
Manufactured goods, which make up about 64% of the index, posted a 3.07% price increase in March, slightly higher than the 2.86% seen in February. Fuel and power prices edged up by 0.20%, reversing the 0.71% decline recorded in the previous month.
The category of primary articles—including food, minerals, crude oil, and natural gas—rose by 0.76% in March, marking a slowdown from February’s 2.81% jump. Within this segment, non-food articles rose 1.75%, down from a 4.84% increase a month earlier.
This data arrives shortly after the Reserve Bank of India cut its benchmark interest rate by 25 basis points, signaling confidence in the declining inflation trend, though global uncertainties and weather risks still loom.
