According to a report by Union Bank of India, wholesale inflation in India is expected to have turned positive in August 2025, rising to 0.45% year-on-year after a contraction of -0.58% in July. The Wholesale Price Index (WPI) bounced back from a recent low in July, driven by gains across food, fuel, and core segments. The shift reflects the fading impact of a high base, with WPI at 1.25% in August 2024 compared to 2.10% in July 2024.
Food inflation, which had been in deflation for the past two months, is expected to return to positive territory in August, reaching a three-month high of 0.21% against -2.14% in July. The rise in food prices was broad-based, with almost all sub-segments witnessing a sequential strengthening. Core inflation also picked up momentum, rising to 1.69% in August from 1.20% in July. Fuel inflation showed some improvement, easing from -3.84% in July to -3.53% in August.
The report notes that external factors, such as global commodity prices and shifting trade scenarios, will continue to influence wholesale inflation trends in the coming months. Domestic factors, including weather-related disruptions and supply chain concerns, could also impact WPI dynamics in the short term. However, upcoming GST reforms are expected to provide relief to wholesale inflation from October, with an estimated 60-basis-point impact on CPI.
The report was published on September 11, 2025, and highlights the volatility of global commodity prices due to uncertainty over shifting trade scenarios, particularly following increased US tariffs and ongoing geopolitical tensions. The Union Bank of India’s report provides insights into the current trends and expected changes in wholesale inflation in India, taking into account both domestic and external factors. Overall, the report suggests that wholesale inflation in India is expected to rise in August 2025, driven by gains across various segments, and that external and domestic factors will continue to play a significant role in shaping inflation trends in the coming months.