Rising metal prices may continue to exert upward pressure on India’s Wholesale Price Index (WPI) in the coming months, according to a report by Union Bank of India. The bank noted that while the headline WPI dropped to a 13-month low in April 2025, certain components—particularly metals—showed a sequential increase. The report stated, “While food prices are expected to firm up in the next couple of months, metal prices may keep an upward pressure on WPI.” Iron and steel prices were among the key contributors, even as global metal indices showed a different trajectory due to lagged sectoral effects.
Core WPI Moderates, But Metals Lead Key Gains
Core WPI, which excludes food and fuel, eased to 1.40 percent in April from 1.59 percent in March. The report attributed this moderation partly to a drop in select sectors, but flagged metals as a significant upward driver. Iron and steel led the gains, followed by chemicals, fabricated metal products (excluding machinery), machinery and equipment, and other manufactured goods. However, prices declined month-on-month in textiles, pharmaceuticals, and paper products.
Fuel Index Plunges, Pulls Down Headline WPI
Headline WPI dropped sharply to 0.85 percent in April from 2.05 percent in March, marking its lowest level in over a year. Union Bank attributed the decline primarily to a steep fall in the fuel index. Fuel WPI remained in negative territory, falling further to -4.35 percent in April from -1.10 percent in March, as global oil prices declined amid rising recession fears.
Outlook: Food And Commodity Prices May Drive Future Trend
The report highlighted that recent gains in commodity prices—including metals and oil—followed the US-China trade deal and could influence WPI trends ahead. It said, “Going forward, trends in WPI are likely to be led by sequential rise in food prices along with commodity prices (especially oil and metals) which are on sequential pickup post US-China trade deal.”
Although food inflation in the Consumer Price Index (CPI) continues to ease, the report noted a reversal in WPI food inflation trends, suggesting potential price pressures in the near term.
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