September 2025 WPI inflation tapers to 0.13% on weaker food prices

15 Oct 2025 , 10:41 AM

SEPTEMBER 2025 WPI INFLATION TAPERS TO +0.13%

WPI inflation has a special place as it not only reflects producer inflation but also the profit margins of companies get impacted by this data point. In August 2025, the WPI inflation had spiked to 0.52% after being in negative zone for 2 months due to the base effect. However, that now looks like a flash in the pan with September WPI inflation back down to 0.13%.

While manufacturing basket did see minor tapering in September due to GST cuts, the real impact was on the food basket, where the GST cut played a big part. However, lower WPI inflation in September 2025 can also be attributed to the base effect, when WPI inflation spiked by 66 bps in year ago period. October 2025 WPI data may give a more rational view.

Month	WPI Inflation (%)	CPI Inflation (%)
Sep-24	1.91%	5.49%
Oct-24	2.75%	6.21%
Nov-24	2.16%	5.48%
Dec-24	2.57%	5.22%
Jan-25	2.51%	4.26%
Feb-25	2.45%	3.61%
Mar-25	2.25%	3.34%
Apr-25	0.85%	3.16%
May-25	0.13%	2.82%
Jun-25	-0.19%	2.10%
Jul-25	-0.58%	1.61%
Aug-25	+0.52%	+2.07%
Sep-25	+0.13%	+1.54%

Data Source: Office of the Economic Advisor

Let us look at how WPI and CPI inflation measure against the last 12 months rolling averages? In the case of WPI inflation, the average of the last 12 rolling months is 1.44%, so the current month WPI inflation is comfortably lower at 0.13%. For CPI inflation, the average of the last 12 rolling months was 3.78%, and the 1.54% reading is also well below that. In WPI Inflation, Manufacturing basket had a big impact due to its 64.23% weight, while in the case of CPI inflation, the Food Basket has a fairly high weightage of 47.25%.

WPI INFLATION SHIFTS: YOY AND MOM

Let us first look at how the WPI inflation basket across primary products, fuel & power, and manufacturing; shifted YOY in last 3 months.

Commodity Set	Weight	Sep-25 WPI	Aug-25 WPI	Jul-25 WPI
Primary Articles	0.2262	-3.32%	-2.10%	-4.70%
Fuel & Power	0.1315	-2.58%	-3.17%	-3.04%
Manufactured Products	0.6423	2.33%	2.55%	2.05%
WPI Inflation	1.0000	0.13%	0.52%	-0.58%
Food Basket	0.2438	-1.99%	0.21%	-2.10%

Data Source: Office of the Economic Advisor

While the fuel & power basket saw some revival with reduced Russian supplies, food and manufacturing WPI showed a dip. Manufacturing WPI dipped due to GST impact on food. Food inflation obviously fell due to GST impact. Now for high frequency MOM data.

Commodity Set	Weight	Sep-25 WPI	Aug-25 WPI	Jul-25 WPI
Primary Articles	0.2262	-1.05%	1.33%	1.29%
Fuel & Power	0.1315	-0.14%	-0.07%	0.98%
Manufactured Products	0.6423	0.21%	0.21%	-0.07%
WPI Inflation	1.0000	-0.19%	0.52%	0.46%
Food Basket	0.2438	-0.78%	1.10%	0.63%

Data Source: Office of the Economic Advisor

The short-term high frequency trend clearly shows that most of the short term WPI depression has come from food and minerals. One needs to watch the crude basket impact, should the supply of Russian crude to India really gets impacted in a meaningful way.

WPI BASKET – BIG SWING FACTORS IN SEPTEMBER 2025

Swing factor are drivers that trigger the shift in WPI; both positive and negative.

Commodity	WPI Inflation	Commodity	WPI Inflation
Vegetable Oil & Fats	14.50%	Onions	-63.79%
Oil Seeds	9.48%	Potatoes	-42.24%
Minerals	6.77%	Vegetables	24.41%
Food Products	4.56%	Pulses	-17.19%
Cement, Lime, Plaster	3.72%	LPG	-7.96%
Wheat	2.97%	Crude Petroleum	-7.45%
Milk	2.97%	Food Articles	-5.22%
Non-Metallic Minerals	2.53%	Fruits	-4.06%
Tobacco Products	2.03%	Petrol	-3.82%
Leather Products	1.84%	Crude & Natural Gas	-3.76%

Data Source: Office of the Economic Advisor

Let us look at upward pressure on WPI inflation in August 2025. Out of the top 10 items pushing WPI inflation up, 5 are from food basket and 5 from the manufacturing basket. What about the downward pressure on WPI? There are 6 products from the food basket 4 from energy basket. The WPI boosters and pressure points are fairly straight forward.

The news on the WPI inflation has 3 parts to it. Firstly, the impact on food basket appears to be largely on account of the GST cuts, and that would be a one-time impact. Secondly, the impact on manufacturing basket is derived from food basket. That could bounce back. Lastly, the area to watch will be fuel basket, where any disruptions in Russian supply could result in an inordinately large impact on WPI inflation. We need to wait and watch!