Wholesale prices increased in December, with inflation measured by the Wholesale Price Index (WPI) rising to 0.83%. This marks the second consecutive month of upward movement after two months of deflation, official data released on Wednesday showed. The return to positive inflation came after wholesale prices contracted in October and November, when WPI inflation stood at (-) 1.21% and (-) 0.32%, respectively. In the same month last year, wholesale inflation was higher at 2.57%. According to the industry ministry, the increase in December was driven by a rise in prices across several segments. “Positive rate of inflation in December 2025 is primarily due to an increase in prices of other manufacturing, minerals, manufacture of machinery and equipment, manufacture of food products, and textiles, etc.,” the ministry said. Food articles remained in deflation, but the pace eased significantly. Deflation in this category narrowed to 0.43% in December from 4.16% in November. Vegetable prices also continued to see negative inflation, although the contraction reduced sharply to 3.50% in December compared with 20.23% a month earlier. Prices of manufactured products showed further strengthening, with inflation rising to 1.82% in December, up from 1.33% in November 2025. Non-food articles recorded an inflation rate of 2.95% during the month, higher than the 2.27% seen in November. The fuel and power segment continued to remain in deflationary territory. Prices in this category fell by 2.31% in December, slightly more than the 2.27% decline recorded in the previous month. Retail inflation also moved higher during the month. Data released earlier this week showed that consumer price inflation increased to 1.33% in December from 0.71% in November, largely due to rising food prices. Against the backdrop of subdued inflation, the Reserve Bank of India (RBI) has lowered policy interest rates by a cumulative 1.25 percentage points so far in the current financial year. Last month, the central bank revised its inflation forecast for the year downward to 2% from 2.6%, citing rapid disinflation in the economy. The RBI, which uses retail inflation as its primary benchmark for monetary policy decisions, reduced the key policy rate by 25 basis points last month to 5.25%. At the time, it described the economy as being in a “rare Goldilocks period” of strong growth alongside low inflation. The central bank has also raised its GDP growth estimate for FY26 to 7.3%, up from an earlier projection of 6.8%. India recorded economic growth of 8.2% in the September quarter and 7.8% in the June quarter.
