Context:
India’s wholesale inflation (WPI) slipped into deflation in October 2025, touching a 27-month low due to a sharp fall in food prices. This is the first time since July 2020 that WPI inflation has turned negative.
Key Highlights:
- WPI inflation fell to –1.21% in October 2025, compared to 0.13% in September.
- Reuters poll had estimated a milder –0.6% decline.
- A year ago, WPI inflation stood at 2.75%.
- The decline was driven primarily by steep deflation in food articles and continued weakness in fuel and power.
Wholesale Price Index (WPI)
- WPI measures the average change in the prices of goods at the wholesale (producer) level, i.e., before reaching consumers.
- Coverage: Includes primary articles (food, fuel, minerals), manufactured products, and fuel & power.
- Purpose:
- Tracks inflation at the factory or wholesale stage.
- Helps policymakers, businesses, and analysts understand price trends in the supply chain.
- Limitation: WPI does not account for services or the actual retail prices paid by consumers.
Consumer Price Index (CPI)
- CPI measures the average change in prices of goods and services purchased by households, i.e., at the retail level.
- Coverage: Includes food, beverages, clothing, housing, health, education, transport, recreation, etc.
- Purpose:
- Tracks retail or consumer inflation.
- Used by the Reserve Bank of India (RBI) to guide monetary policy and interest rate decisions.
- Advantage: Reflects the actual cost of living for households, including services, unlike WPI.
In short:
- WPI = Wholesale-level prices → supply chain perspective
- CPI = Consumer-level prices → retail/household perspective
