WPI Inflation Falls to -1.21% in October 2025 on GST Cut and Favourable Base

WPI inflation falls to -1.21% in October 2025 due to GST rate cuts and a favourable base, driven by lower food, fuel, and manufactured goods prices.

Wholesale price inflation (WPI) in India fell to -1.21% in October 2025, according to government data released on November 14, 2025. The decline comes on the back of lower prices for food articles, fuel, and manufactured goods, as well as the impact of recent Goods and Services Tax (GST) cuts.

WPI inflation was 0.13% in September 2025 and 2.75% in October 2024, reflecting a sharp moderation in price pressures over the year.

Food Prices Lead the Decline

The Ministry of Industry stated that the negative inflation rate is primarily due to falling prices in:

• Food articles such as pulses, vegetables, potatoes, and onions

• Fuel and power including crude petroleum and natural gas

• Manufactured goods such as basic metals and mineral oils

Deflation in food articles was particularly notable at 8.31% in October, compared to 5.22% in September. Prices of vegetables fell 34.97%, pulses dropped 16.50%, while potato and onion prices declined 39.88% and 65.43%, respectively.

Manufactured Products and Fuel Also See Decline

Manufactured product inflation eased to 1.54% in October from 2.33% in September.

Fuel and power sectors experienced deflation of 2.55%, almost unchanged from 2.58% in September, reflecting stable energy prices.

Impact of GST Rate Cuts

The fall in WPI inflation aligns with expectations following GST rate reductions effective September 22, 2025. Under the new tax rationalisation:

• The previous four-tier tax structure was reduced to two slabs of 5% and 18%

• Daily-use mass consumption items became cheaper, directly contributing to lower wholesale and retail prices

Retail Inflation Also Hits Historic Low

Recent data show that retail inflation (CPI) dropped to 0.25% in October 2025, the lowest in years. This is a significant decline from 1.44% in September, reflecting both GST cuts and a high base effect from last year.

The moderation in both wholesale and retail inflation is likely to influence monetary policy decisions. The Reserve Bank of India (RBI), which monitors retail inflation, kept its benchmark policy rates unchanged at 5.5% in the previous review. However, the current decline may increase pressure on the RBI to consider a rate cut in its next policy meeting scheduled December 3–5, 2025.

Outlook

Economists view the fall in WPI and retail inflation as a temporary relief for consumers, driven by tax policy and favorable base effects. If these trends continue, India could see lower borrowing costs, increased consumer spending, and improved growth prospects in the coming months.