India's Wholesale Inflation Eases To 2.31% In January
The Wholesale Price Index-based inflation for January was also lower than the estimate of 2.5%.
India's wholesale price inflation eased to 2.31% in January, as compared to 2.37% in December, data released by the Ministry of Commerce and Industry showed on Friday.
The Wholesale Price Index-based inflation for the month was also lower than the estimate of 2.5%.
While wholesale inflation in primary articles declined, led by easing food article inflation, the month witnessed an increase in prices of manufactured products, along with continuing deceleration in fuel and power.
Within the food basket, vegetables such as potatoes led the decline in prices.
ICRA expects the WPI-food inflation to ease further to sub-7.0% in February 2025 from 7.5% in January 2025. After rising sharply in January 2025, global commodity prices have inched up further in February 2025 so far, amid growing uncertainty around the impact of the US protectionist trade policies. This would exert an upward pressure on the WPI non-food component, according to a note by ICRA.
Besides, the USD/INR pair has depreciated, averaging at 87.19/$ during Feb. 1-13, 2025, against 86.25/$ in January 2025, which would likely push up the landed cost of imports in the ongoing month, the note added.
As such, ICRA expects the headline WPI inflation to inch up to 2.4-2.6% in February 2025 from 2.3% in January 2025, with cooling in the WPI-food inflation partly offsetting the adverse impact of the uptick in commodity prices and the depreciation in the USD/INR pair on the non-food segments.
WPI Key Internals
Inflation in manufactured products—the largest component of the index—rose by 2.51% in January versus 2.14% In November.
Primary articles inflation at 4.69% versus 6.02%.
Inflation in food articles—a sub-component of primary articles— rose 5.88%, compared to a rise of 6.91% in December.
Fuel and power inflation at -2.78% versus -3.79%.
Vegetables: 8.35%, potato: 74.28%, fruits: 15.12%.
