WPI Turns Positive at 0.83% in December, CPI Stays Low at 1.33%

India’s inflation picture strengthened further in December 2025, with wholesale inflation returning to positive territory while retail inflation remained unusually low, signalling a rare combination of easing cost-of-living pressures and stabilising producer prices. At the consumer end, India’s (Consumer Price Index) CPI inflation stood at 1.33% in December 2025, keeping it well below the RBI’s tolerance band and placing the country among the lowest-inflation large economies globally.

Official data released by the Ministry of Commerce and Industry showed that Wholesale Price Index (WPI) inflation rose to 0.83% (provisional) in December, up from (-) 0.32% in November and (-) 1.02% in October , marking a steady improvement over three months. The government attributed the rise mainly to higher prices in other manufacturing, minerals, machinery and equipment, food products and textiles , indicating the pickup was largely manufacturing-led rather than fuel-driven.

The strongest push came from manufactured products , the largest component of WPI, where inflation increased to 1.82% in December , reflecting broad-based price firming across several industrial categories. In contrast, the Fuel & Power group continued to remain in deflation at (-) 2.31% , helping prevent the wholesale rebound from turning into a sharper cost shock. Food price pressures also softened further: the WPI Food Index inflation improved to 0.00% in December , from (-) 2.60% in November , indicating wholesale food prices were flat compared to the same period last year.

The inflation outcome appears stronger when seen against the global backdrop. While inflation has eased worldwide from post-pandemic peaks, most major economies still report significantly higher retail inflation. Comparable readings showed the United States at around 2.7% , the Euro Area at about 2.0% , and the United Kingdom at roughly 3.2% , underlining India’s relative advantage on price stability even as global pressures remain uneven.

Economists generally view the current combination of low CPI with mildly positive WPI as supportive for growth. Low retail inflation protects household purchasing power, while positive WPI suggests industry is no longer trapped in deflation, which can weaken investment sentiment and earnings. At the same time, analysts caution that if manufacturing-led WPI rises faster in the coming months, producers may pass increased input costs to consumers over time, pushing CPI upward with a lag.

To sustain this favourable position, India must strengthen resilience in key areas. The biggest priority remains food inflation shock-proofing through better buffer management, stronger cold-chain and storage capacity, and quicker import response for sensitive items such as pulses and edible oils. India also needs to reduce exposure to fuel volatility and imported inflation through energy diversification and improved power-sector efficiency. Since the December WPI rise is manufacturing-driven, controlling logistics and intermediate input costs will be essential to prevent wholesale inflation from feeding into retail prices. Finally, stronger external sector stability including exports and currency resilience will help limit imported price shocks in commodities such as crude and other key manufacturing inputs.