India’s Wholesale Inflation Edges Up to 2.38% in February

Inflation

Key Facts: 

In economics, inflation is an increase in the average price of goods and services in terms of money.  

Inflation is usually measured using a consumer price index (CPI). 

Prime Highlights: 

Wholesale Price Inflation (WPI) rose to 2.38% in February 2025, up from 2.31% in January. 

WPI saw a 0.06% increase in February compared to January. 

Key Background: 

India’s wholesale price inflation (WPI) increased to 2.38% in February 2025, up from 2.31% in January, as higher prices in several key sectors contributed to the rise. The month-on-month change in WPI stood at 0.06% when compared to the previous month. The rise in wholesale inflation was primarily driven by higher costs in the manufacturing of food products, food articles, non-food articles, and textiles. A notable increase was seen in the inflation of manufactured food products, which surged by 11.06%, while vegetable oils jumped by 33.59%. Beverages also saw a slight rise of 1.66%.  

However, there were some signs of moderation in certain areas. Wholesale food inflation slowed to 5.94% in February, down from 7.47% in January. Primary articles inflation also eased to 2.81% in February, compared to 4.69% the previous month. The prices of vegetables notably cooled, with potato prices falling by 27.54%, down from 74.28% in January. The WPI Food Index, which combines food articles and manufactured food products, declined to 189.0 in February from 191.4 in January.  

Consequently, the annual rate of inflation based on this index decreased from 7.47% in January to 5.94% in February. In contrast, the fuel and power sector saw a contraction in prices, with wholesale prices declining by 0.71%, compared to a sharper contraction of 2.78% in January. 

Earlier forecasts, including one from the Union Bank of India, had predicted a drop in the WPI for February, with expectations for inflation to ease to around 2%. These projections were based on anticipated declines in oil prices and seasonal reductions in food prices. Despite the overall increase in WPI, subdued food prices helped keep retail inflation under control, falling below the Reserve Bank of India’s median target of 4%. Additionally, India’s manufacturing sector showed positive momentum, with factory output rising by 5% in January. 

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