Wholesale Inflation (WPI)

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