India's wholesale prices sustained a deepened deflationary trend in July, possibly opening a pathway to easing by the nation's central bank.
Pulled down by food and fuel bills, India's wholesale price index (WPI) declined 0.58% on year in July, on the heels of a 0.13% on-year decline in June, reported the Ministry of Commerce & Industry (MCI) on Thursday.
India's WPI measures the prices of goods sold in bulk at the factory gate, or by large distributors. The WPI is distinct from the consumer price index (CPI), which captures prices in retail locations paid by ordinary shoppers.
However, the WPI is considered one precursor to later movements in the CPI, as retailers try to recoup or pass on savings to customers.
In July, the WPI for primary articles (generally, unprocessed food and materials) fell 4.95% on year, while fuel and power bills declined 2.43% on year. In contrast, the WPI for manufactured products rose 2.05% on year, said the MCI.
The WPI Food Index slipped 2.15% on year in July, said the MCI, citing a good monsoon season.
Despite a softening WPI, on Aug. 6, the Reserve Bank of India (RBI) voted to keep its key policy interest rate unchanged at 5.50%, citing previous rate cuts amounting 100 basis points already in 2025, and also stating that inflation "is projected to go up from the last quarter of this financial year (2026's first quarter)."
However, India's CPI in July rose a modest 1.55% on year in July, the ninth straight month of cooling inflation by that metric and also an eight-year low, reported officials on Tuesday.
The RBI has an inflation target band of 4%, plus or minus 2%.
At its last meeting, the RBI forecast India's gross domestic product would expand by 6.5% in the year ended April 1, and consumer inflation was forecast at 3.1% for the year, down from a previous outlook of 3.7%.
The next RBI policy meeting is slated for Sept. 29 through Oct. 1.
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