India's wholesale inflation reversed course in December 2025, rising to an eight-month high of 0.83% and ending a two-month period of deflation. The shift was driven by rising prices in key manufacturing sectors and food products, signaling potential future price pressures for consumers.
The latest data from the Ministry of Commerce & Industry shows the Wholesale Price Index (WPI) moved from negative territory (-0.32% in November) into positive growth. This development comes alongside a recent uptick in retail inflation, which reached 1.33% in December.
Breaking Down the December WPI Numbers
The return to positive wholesale inflation was broad-based. The government statement attributed the increase primarily to price rises in "other manufacturing, minerals, manufacture of machinery and equipment, manufacture of food products, and textiles".
A closer look at the major groups reveals specific trends:
Manufactured Products (64.23% weight): Inflation here accelerated to 1.82% in December, up from 1.33% in November. This is significant as manufactured goods carry the heaviest weight in the index.
Primary Articles (22.62% weight): This group, which includes food, saw its inflation rate turn positive at 0.21%, a sharp reversal from -2.93% in November. Notably, while the overall food index inflation rate hit 0.00%, up from -2.60%, specific food articles remained in deflation at -0.43%.
Fuel and Power (13.15% weight): This segment remained in deflationary territory at -2.31%, providing some counterbalance to rising prices elsewhere.
What This Means for the Economy and Consumers
The Wholesale Price Index measures price changes at the producer and wholesale level, acting as a leading indicator for future consumer price trends. When businesses pay more for raw materials and manufactured goods, these costs often eventually get passed on to consumers.
The simultaneous rise in both WPI and Consumer Price Index (CPI), which measures retail inflation, suggests building price pressures in the economy. The RBI, which uses CPI as its primary guide for monetary policy, has recently described the economy as being in a "rare Goldilocks period" of high growth and low inflation. It has cut interest rates by 1.25 percentage points this fiscal year and lowered its inflation projection for FY26 to 2%.
Context and Outlook
The current WPI level of 0.83% remains well below the 2.57% recorded in December 2024. The positive turn ends a short deflationary phase that saw WPI at -1.21% in October 2025.
Economists watch WPI closely because sustained increases can squeeze producer margins and ultimately affect the prices consumers pay for everything from textiles to machinery. The data will be a key consideration for policymakers balancing growth support with inflation management.
