Paras Jasrai, deputy director of India Ratings and Research (IND-RA), attributed the order of inflation to the decline in benign food prices and the decline in energy and mineral prices.
Overall, wholesale price inflation rose from -0.7% in fiscal 24 to 2.3%, according to WPI data.
“The decline in crude oil prices has been related to the index and will continue to be downward,” said Madan Sabnavis, chief economist at the Bank of Varoda.
He also emphasized that in addition to moderate vegetable and legume prices, the basic effect played an important role, and food inflation was low.
WPI food inflation fell from 5.9% in February to a seven-month low of 4.7% in March. Every year, of 6.6% in FY24, it rose to 7.8% in FY25.
Among key foods, the inflation rate of vegetables and beans in March shrank by 15.9% and 3% year-on-year, respectively. On the other hand, fruit inflation soared to 20.8% due to low basic effects.
The price of potatoes fell 6.8%, while the price of onions soared 26.7%.
Cereal inflation was 5.5% at a 14-month low, due to better production in Kharif.
“As we start a new fiscal year, the relief of food inflation will help to provide relief to families and consumer demand,” Jasrai said.
Inflation for finished products, which accounted for 64.23% of WPI, increased from 2.9% in February to 3.1% in March.
Among finished products, the inflation rate of vegetables and animal oils and fats is up to 31%, followed by food production at 10.7%.
The inflation rate for the main articles in March fell to 0.76% from 2.81% in February. However, fuel and electricity inflation became positive, rising from -0.71% to 0.2%.
The wholesale core inflation rate was above 1.6% in the two-year high in March due to rising gold prices.
Going forward, WPI inflation is expected to remain at these low levels, Sabnavis said.
“The positive spillover effect of low commodity prices will be felt through short-term wholesale inflation. In addition, a satisfactory completion of Rabi output will make food inflation comfortable,” Jasrai said.
