CHENNAI: India’s wholesale inflation inched closer to zero in November, signalling a gradual easing of deflationary pressures at the producer level. Data showed that Wholesale Price Index inflation rose to minus 0.32 per cent in November from minus 1.21 per cent in October, indicating that prices are no longer falling as sharply as they were in previous months.
The improvement was driven by firmer prices in primary articles and manufactured goods. Food prices, which had declined steeply earlier due to better supply conditions, showed signs of stabilising. While prices of vegetables and other perishable items remained volatile, the pace of decline slowed, offering some support to the overall index.
Manufactured products, which account for the largest share of the wholesale inflation basket, also contributed to the softer deflation. Prices of metals, chemicals and other industrial inputs showed mild recovery as global commodity prices stabilised and domestic demand held up. However, manufacturers continued to face limited pricing power, reflecting cautious demand conditions across sectors.
Fuel and power prices remained largely contained, helping keep wholesale inflation in negative territory. Despite fluctuations in global energy markets, domestic fuel prices did not exert significant upward pressure on the index, reinforcing the trend of subdued input costs.
From a broader economic perspective, the November reading suggests that wholesale deflation is easing but has not yet given way to sustained inflation. Lower input costs provide relief to businesses by supporting margins, but they also point to muted demand that limits the ability of companies to raise prices.
The gap between wholesale and retail inflation remains significant. While retail inflation has been more sensitive to food prices and services costs, wholesale inflation continues to reflect softer commodity prices and restrained industrial pricing. This divergence highlights the different inflation pressures faced by producers and consumers.
Overall, the rise in wholesale inflation in November marks a step towards price normalisation rather than a sharp turnaround. It indicates improving price momentum at the margin, even as the broader inflation environment remains benign and supportive of economic stability.