A Reuters poll of economists had projected wholesale price index (WPI)-based inflation to moderate rise slightly to 0.52% in June.
Inflation in manufactured products, which account for over 60% of the wholesale inflation basket, came in at 1.97% for the month. The inflation rate for primary articles contracted to 3.38% in June, compared to 2.02% in May.
Meanwhile, inflation in fuel and power slowed to 2.65%, against 22.27% in the previous month.
India’s retail inflation fell to a more than six-year low of 2.82% in May 2025. The figure represents a decline of 34 basis points from April and marks the lowest annual inflation rate recorded since February 2019.
A look at inflation rate in India’s kitchenAs inflation eased overall, the primary fall in prices in June was recorded in the food basket. Inflation for vegetables fell to 22.65% in June, compared to 21.62% in May. Onion inflation eased to 33.49%, down from 14.41% a month earlier; whereas, potato inflation stood at (-)32.67%, compared to (-)29.42% in May. Prices of pulses stood at (-)22.65%, against 10.41% in the prior month; while cereal inflation fell to 3.75% after recording 2.56% in May.
Separately, retail inflation in the country dropped to an over six-year low of 2.82% in May 2025.
RBI’s inflation outlook
The Reserve Bank of India’s Monetary Policy Committee (MPC), in its April meeting, cited a continued moderation in price pressures, mainly driven by softer food costs.
It projected further easing in FY26, offering relief to consumers. The MPC revised its FY26 inflation forecast to 4%, down from its earlier projection of 4.2%.
Quarter-wise projections showed inflation expected to average 3.6% in the first quarter, 3.9% in the second quarter, 3.8% in the third quarter, and 4.4% in the final quarter of FY26.
Moreover, the central bank assessed risks to inflation as broadly balanced.
