India’s wholesale price index (WPI) inflation in April declined into the negative territory for the first time since July 2020. The inflation came in at -0.92 per cent, falling largely due to base effect, according to the data released by the Ministry of Commerce and Industry on Monday. In March, the WPI inflation was 1.34 per cent. 

The food price inflation in April dropped significantly to  0.17 per cent from March’s 2.32 per cent, while the manufactured products inflation declined 2.42 per cent slipping deep in the negative zone and primary articles and fuel & power inflation in at 1.6 and 0.9 per cent, respectively. In March, the inflation in this category was -0.77 per cent.

According to the commerce ministry, “Decline in the rate of inflation in April 2023 is primarily contributed by fall in prices of basic metals, food products, mineral oils, textiles, non-food articles, chemical & chemical products, rubber & plastic products and paper & paper product.”

The RBI’s MPC takes into account the CPI index for arriving at the monetary policy decisions. A lower CPI print for April means that the RBI could keep interest rates unchanged in the June policy depending on how the trajectory pans out until then.

Primary articles and fuel & power categories saw inflation of 1.6 per cent and 0.93 per cent in April, respectively. “Prices of Crude Petroleum & Natural Gas (3.47 per cent), Minerals (2.30 per cent) and Food Articles (1.45 per cent) increased in April 2023 as compared to March 2023. Prices of Non-food Articles (-0.66 per cent) declined in April 2023 as compared to March 2023,” the ministry said.

On Friday, India’s retail inflation dropped to 4.7 per cent in April from 5.66 per cent in March, an 18-month low due to favourable base, according to data from the Ministry of Statistics and Programme Implementation.

The food inflation also eased to 3.84 per cent in April. It was 4.79 per cent in March.  It was for the second month in a row that Consumer Price Index (CPI) based inflation remained within the RBI’s comfort zone of below 6 per cent.

The retail inflation based on Consumer Price Index (CPI) was 5.66 per cent in March 2023 and 7.79 per cent in the year-ago period. Retail inflation in April is the lowest since October 2021 when it was at 4.48 per cent.