India's wholesale inflation showed its first month-on-month decline under the latest Wholesale Price Index (WPI) series in July, offering some relief after prices had climbed through the opening months of the financial year.

WPI-based inflation eased to 9.78 per cent in July 2026, from 9.87 per cent in June, according to data released by the Commerce and Industry Ministry on Friday. The moderation was largely supported by softer inflation in fuel and power and food articles.

The latest reading marks the first month-on-month decline since the government introduced the WPI series with the new 2022-23 base year.

Fuel And Food Prices Offer Some Relief

The moderation in wholesale inflation was led by a cooling in two major components of the index.

Inflation in fuel and power declined sharply to 20.05 per cent in July, compared with 27.41 per cent in June. Food article inflation also eased, though only marginally, to 5.44 per cent from 5.49 per cent during the same period.

The decline comes after wholesale prices had been rising since the beginning of the financial year. The Commerce and Industry Ministry attributed the broader pressure to developments in global energy and commodity markets.

The West Asia conflict and the resulting disruption around the Strait of Hormuz had pushed up global crude oil and fertiliser costs, with the increase eventually feeding into food prices.

Manufacturing Prices Move In The Opposite Direction

The moderation in the headline WPI number was not broad-based across all categories.

Inflation in manufactured products increased to 8.29 per cent in July, compared with 7.48 per cent in June.

The Commerce and Industry Ministry identified several components as key drivers of wholesale inflation during the month, including mineral oils containing petroleum products, food articles, basic metals, non-food articles, manufactured food products, and chemicals and chemical products.

This divergence between lower fuel and food inflation and higher manufactured-product inflation meant that the overall decline in WPI remained limited.

Retail Inflation Had Moved Higher In July

The wholesale inflation reading comes after the latest retail inflation data showed a different trend.

Data released earlier this week showed that India's Consumer Price Index (CPI)-based retail inflation increased to 4.45 per cent in July, from 4.38 per cent in June, with higher food prices contributing to the increase.

The two inflation measures track prices at different stages of the economy. The WPI largely reflects price movements at the wholesale level, while CPI inflation captures prices faced by consumers.

The July WPI data therefore provides a mixed picture of price pressures, with wholesale inflation easing slightly even as retail inflation moved higher.

RBI Keeps Rates Unchanged

The inflation numbers also come against the backdrop of the Reserve Bank of India's latest monetary policy decision.

Earlier this month, the RBI's Monetary Policy Committee kept the benchmark policy rate unchanged at 5.25 per cent. The central bank projected retail inflation at 5 per cent for FY27, citing an uneven and deficient south-west monsoon along with El Niño conditions.

The WPI figures will therefore be closely watched alongside retail inflation and developments in global commodity markets as policymakers assess the trajectory of price pressures.

For July, the headline wholesale inflation number points to a marginal easing, helped by softer fuel and food prices. However, the rise in manufactured-product inflation and continuing global commodity uncertainties suggest that price pressures across different parts of the economy remain uneven.