The Wholesale Price Index (WPI) based inflation in India has dropped to its lowest level in 29 months. It eases at 1.34% in March 2023 due to the moderation in input prices according to government data released on Monday. This marks the 10th consecutive month of WPI-based inflation decline.

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In February, the WPI inflation data stood at 3.85%, while in January 2023 it was at 4.73%. However, in March 2022, it had spiked to a high of 14.63%. On the other hand, the food index inflation rate decreased from 2.76% in February to 2.32% in March. Additionally, for the primary articles segment, the inflation rate dropped from 3.28% in February to 2.40% in March 2023.

The inflation rates for wheat and pulses were 9.16% and 3.03%, respectively, while for vegetables, it was (-)2.22% in March 2023. Meanwhile, inflation in oilseeds was (-)15.05%. The fuel and power basket inflation decreased from 14.82% in February to 8.96% in March. For manufactured products, the inflation rate was (-)0.77%, in contrast to 1.94% previously.

The Wholesale Price Index (WPI) is a way to calculate the average price of a representative basket of wholesale goods in India. It comprises three categories, namely primary articles (weighing 22.6% of the total), fuel and power (13.2%), and manufactured products (64.2%).

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As per a statement by the Ministry of Commerce and Industry, the reduction in the wholesale inflation rate in March can be attributed to the decrease in prices of basic food products, metals, textiles, non-food articles, rubber and plastic products, minerals, crude petroleum & natural gas, and paper and paper products.

The slowdown in Wholesale Price Index (WPI) is consistent with the relaxation of retail inflation in March. India’s retail inflation has recently dropped to 5.66% in March, which is below the Reserve Bank of India’s upper tolerance level of 6%, for the first time in three months. This decline was due to a favourable base and a reduction in pent-up demand.