Wholesale prices in India moved higher during December. Official data released on Wednesday shows inflation measured by the Wholesale Price Index rose to 0.83 percent. This marks the second straight month of upward movement following two months of deflation.
Return to Positive Territory
The wholesale inflation number turned positive after contracting in October and November. Prices fell by 1.21 percent in October and 0.32 percent in November. In December of last year, wholesale inflation stood higher at 2.57 percent.
According to the industry ministry, several segments saw price increases. "Positive rate of inflation in December 2025 is primarily due to an increase in prices of other manufacturing, minerals, manufacture of machinery and equipment, manufacture of food products, and textiles, etc.," the ministry stated.
Sector-Wise Performance
Food articles remained in deflation, but the pace eased significantly. Deflation in this category narrowed to 0.43 percent in December from 4.16 percent in November.
Vegetable prices also continued to see negative inflation. However, the contraction reduced sharply to 3.50 percent in December compared with 20.23 percent a month earlier.
Prices of manufactured products showed further strengthening. Inflation here rose to 1.82 percent in December, up from 1.33 percent in November 2025.
Non-food articles recorded an inflation rate of 2.95 percent during the month. This was higher than the 2.27 percent seen in November.
The fuel and power segment continued to remain in deflationary territory. Prices in this category fell by 2.31 percent in December. This was slightly more than the 2.27 percent decline recorded in the previous month.
Retail Inflation Also Moves Higher
Consumer price inflation increased during the same period. Data released earlier this week showed retail inflation rose to 1.33 percent in December from 0.71 percent in November. Rising food prices largely drove this increase.
RBI's Monetary Policy Stance
Against the backdrop of subdued inflation, the Reserve Bank of India has lowered policy interest rates. The central bank cut rates by a cumulative 1.25 percentage points so far in the current financial year.
Last month, the RBI revised its inflation forecast for the year downward. It now expects 2 percent inflation, down from an earlier projection of 2.6 percent. The bank cited rapid disinflation in the economy.
The RBI uses retail inflation as its primary benchmark for monetary policy decisions. It reduced the key policy rate by 25 basis points last month to 5.25 percent.
At the time, the central bank described the economy as being in a "rare Goldilocks period" of strong growth alongside low inflation.
Growth Estimates Revised Upward
The RBI has also raised its GDP growth estimate for FY26. It now projects 7.3 percent growth, up from an earlier projection of 6.8 percent.
India recorded strong economic growth in recent quarters. The economy expanded by 8.2 percent in the September quarter and 7.8 percent in the June quarter.
