NEW DELHI: India’s wholesale price inflation rose for a second straight month in December 2025, returning to positive territory as higher prices of food items, non-food articles and manufactured goods offset deflation in fuel and power, official data released on Wednesday showed.
Wholesale Price Index (WPI)-based inflation stood at 0.83% year-on-year in December, compared with -0.32% in November and -1.02% in October, according to data from the Department for Promotion of Industry and Internal Trade (DPIIT). This marked the end of a two-month deflationary phase. WPI inflation was 2.57% in December 2024.
“Positive rate of inflation in December 2025 is primarily due to increase in prices of other manufacturing, minerals, manufacture of machinery and equipment, manufacture of food products and textiles etc.,” said the official statement.
Sequentially, inflation in primary articles, which include food products and minerals, rose 0.21% from November, while manufactured products recorded an increase of 1.82%. This was partly offset by deflation of 2.31% in the fuel and power category. Within primary articles, mineral prices rose 1.62% and food articles increased 0.88%.
In the fuel and power segment, electricity prices rose 4.46%, coal prices increased 0.66%, and mineral oil prices edged up 0.07% in December compared with November.
“While the WPI expectedly reverted to an inflation of 0.8% in December 2025 after a gap of two months, the reading was mildly higher than ICRA’s expectations (+0.4%). The sequential hardening in the YoY WPI inflation was largely led by the WPI-food index, which was flat compared to year ago levels following the 2.6% contraction in November 2025,” said Rahul Agrawal, senior economist, Icra Ltd.
The rise in wholesale inflation comes a day after retail inflation also ticked up for the second consecutive month in December. Consumer Price Index (CPI)-based inflation rose to 1.3%, a three-month high.
“With this uptick, the gap between the CPI and the WPI inflation has narrowed to just 50 bps in December 2025 from 100 bps in November 2025,” Agarwal said.
Core WPI inflation, which tracks non-food manufactured items, rose to a 34-month high of 2% in December from 1.5% in November. According to Agrawal, this reflected hardening global commodity prices and the depreciation of the rupee in recent months, which likely pushed up the landed cost of imports.
Icra expects wholesale food inflation to harden further in January 2026 and remain on an upward trajectory thereafter due to an unfavourable base. Global commodity prices have also continued to rise sequentially in January, led by sharp gains in precious metals and some firming in industrial metals, even as oil prices have cooled.
The ratings agency has projected WPI inflation at 1.5% year-on-year in January.
Inflation trends are closely tracked by policymakers and influence central bank decisions on interest rates. A recent Crisil report said the Reserve Bank of India’s Monetary Policy Committee is expected to hold rates in the upcoming financial year (FY27), despite expectations of rising inflation, as price pressures are likely to remain within the RBI’s 2-6% target band.
“Also, next fiscal, we expect economic growth to ease but remain above trend,” it said.