India's wholesale price index (WPI) inflation emerged from the deflationary trend, registering a rise to 0.26% in November, as per data released by the Commerce Ministry on December 14. This marks the first time in eight months i.e. since March 2023 that the wholesale inflation has entered the positive territory.
In October 2023, the WPI inflation was at -0.52%, while in November 2022, it stood at 6.12%. The positive inflation rate has been attributed to price increases in various sectors, including food articles, minerals, machinery and equipment, computer, electronics and optical products, motor vehicles, other transport equipment, and other manufacturing categories.
Among the sub-groups, the wholesale inflation for the primary articles was at 4.76% in November 2023, up from 1.82% in October month. In the fuel and power category, the WPI saw deflation at -4.61%, up from -2.47% in October 2023. In the manufactured products category, the deflations stood at -0.64%, down from -1.13% in October. The food index, consisting of 'food articles' from the primary articles group and 'food product' from the manufactured products group, saw the rate of inflation based on WPI increasing to 4.69% in November 2023 from 1.07% in October 2023.
Key groups reflecting a month-over-month price increase include other manufacturing, manufacturing of food products, motor vehicles, trailers & semi-trailers, fabricated metal products (excluding machinery & equipment), wood & products of wood & cork, among others.
On the other hand, groups such as manufacturing of basic metals, electrical equipment, textiles, other non-metallic mineral products, rubber & plastic products, among others, registered a decrease in prices in November 2023 compared to October 2023.
Notably, India experienced a rise in retail inflation in November, which touched 5.55% in the month as compared to the previous month's 4.87%, as reported by the National Statistical Office (NSO). Despite this increase, retail inflation continues to fall within the acceptable range of 2-6% set by the Reserve Bank of India (RBI). Breaking it down, rural inflation saw an uptick to 6.09% in November from 5.12% in October, while urban inflation witnessed a surge to 5.68% in November, up from 4.62% in the preceding month.
In the previous week, the central bank after its MPC meeting kept the retail inflation (CPI) forecast for FY24 "unchanged" at 5.4%. The RBI governor said the central bank was aiming to achieve a 4% consumer price-based index (CPI) inflation target, even though elevated global sugar prices were worrying. The RBI also kept “unchanged” the inflation estimates for the remaining quarters of the fiscal year.
