India's wholesale price inflation (WPI) has edged up to 0.83% in December 2025, according to official government data released on Wednesday. This marks a rise from the 0.32% contraction recorded in November. The positive rate of inflation in December is primarily attributed to increases in prices of manufactured goods, minerals, machinery and equipment, food products, and textiles.

The Ministry of Commerce and Industry stated that the increase in the WPI was largely due to price increases in the manufacturing, minerals, machinery and equipment, food products, and textiles sectors.

Key Drivers and Components:

• Manufactured Products: Inflation in manufactured products rose to 1.82% in December, compared to 1.33% in November.
• Primary Articles: The index for primary articles saw a rise, with inflation increasing to 0.21% in December from -2.93% in November.
• Food Articles: Food inflation was flat at 0.00% in December, following a contraction of 2.60% in November. While food articles continued to experience deflation, the rate was slower than the previous month. Vegetable prices, in particular, saw a significant moderation in deflation, easing to 3.50% from 20.23% in November.
• Fuel and Power: The fuel and power sector remained in deflationary territory, with prices declining by 2.31% in December, similar to the previous month.
• Non-Food Articles: This segment recorded an inflation rate of 2.95% in December, up from 2.27% in November.

Comparison to Previous Months:

In November 2025, the WPI had contracted by 0.32%, preceded by a 1.21% drop in October. The December figure indicates a return to positive territory after two months of deflation. A year earlier, in December 2024, the WPI inflation stood at 2.57%.

Retail Inflation:

Concurrently, retail inflation also experienced an uptick, reaching a three-month high of approximately 1.3% in December. This increase was attributed to the easing of food deflation and strengthening price pressures in miscellaneous items. Despite the rise, retail inflation remained below the Reserve Bank of India's (RBI) target of 4% for the fourth consecutive month.

Expert Projections and Market Impact:

A Reuters poll of economists had projected a WPI-based inflation rate of 0.30% for December, which the actual figure surpassed. December's WPI data may influence investor sentiment regarding pricing power, costs, and expectations for interest rates.

RBI's Monetary Policy:

The Reserve Bank of India (RBI) has been closely monitoring both wholesale and retail inflation, with its policy decisions primarily based on retail inflation trends. In the current financial year, the RBI has reduced interest rates by 125 basis points amidst a period of low inflation. Last month, the central bank cut the benchmark policy rate by 25 basis points to 5.25%.