The Wholesale Price Index (WPI)-based inflation declined 0.8% in July 2025. “The moderation was driven by lower prices of mineral oils and crude petroleum and natural gas, reflecting the sequential softening in global energy prices in July,” said Rajani Sinha, chief economist at CareEdge Ratings.
Retail inflation, meanwhile, edged up to 4.5% year-on-year in July from 4.4% in June, data released earlier this week showed. The Producer Price Index (PPI) output inflation remained unchanged at 9.6% year-on-year in July. The government also released a trial Input PPI for manufacturing, which fell to 105.9 in July from 107.1 in June, indicating a 1.1% decline.
Fuel and power remained the largest contributor to wholesale inflation despite the segment’s price rise moderating to 20.1% in July from 27.4% in June. Within the segment, mineral oil inflation stood at 32.4% compared with 46.5% in the previous month while inflation in crude petroleum and natural gas fell to 27% from 34.8%.
Inflation in manufactured products, however, rose to 8.3% year-on-year in July from 7.5% in June while inflation in primary articles accelerated to 8.5% from 7%. Among manufacturing sub-groups, inflation remained elevated in tobacco products (13.4%), chemicals (13.1%), textiles (12.8%) and basic metals (12.6%).
Sinha said the increase in manufactured-product inflation could be attributed to the pass-through of higher input costs. Food inflation, which accounts for around a quarter of the basket, rose to a 19-month high of 6.6% in July from 6.1% in June.
“This was largely led by a broad-based uptick across manufactured food items and most primary food articles barring fruits and vegetables,” said Rahul Agrawal, principal economist at ICRA.
Looking ahead, WPI inflation is expected to ease below 9.5% in August, he added.