Wholesale inflation in India reaches 9 month high to 1.81%

India’s wholesale price inflation rose to a nine-month high of 1.81% in January from 0.83% in December, reflecting higher costs in basic metals, manufactured goods, non-food articles and textiles. Food inflation also picked up to 1.41% after remaining flat a month earlier, signalling gradual price pressures at the producer level.

Retail inflation edged up to 2.75% in January under the revised Consumer Price Index series with 2024 as the base year. Rural inflation stood at 2.73% while urban inflation came in at 2.77%, largely driven by food and precious metal prices.

Primary articles inflation accelerated sharply to 2.21% from 0.21% in December, while manufactured products inflation rose to 2.86%. Fuel and power inflation stayed in negative territory at minus 4.01%. Among kitchen staples, vegetable prices rebounded 6.78% year-on-year, though onions and potatoes remained in deflation and cereal and pulse prices continued to contract.

The Reserve Bank of India kept the repo rate unchanged at 5.25% with a neutral stance, even as it slightly raised its inflation projections for early FY27 and projected FY26 headline inflation at 2.1%. The central bank also nudged its GDP growth forecast for 2025-26 up to 7.4%.