The WPI year-on-year (YoY) deflation narrowed faster than expected to 0.3% in November 2025 from 1.2% seen in the prior month (ICRA’s est.: -0.6%). Even as an elevated base for primary food articles kept the print muted at (-) 4.2% in November 2025, the extent of deflation almost halved from 8.3% seen in October 2025, pushing up the headline print by as much as ~89 bps between these months. This was followed by primary non-food articles, minerals, and fuel and power, which witnessed a higher YoY print during this period. ICRA expects the WPI to have bottomed out in October 2025 and revert to an inflation of ~0.5% in December 2025. Subsequently, we project it to average above 1.5% in Q4 FY2026, pushed up by multiple factors like narrowing deflation in the food segment, uptick in global commodity price inflation, as well as depreciation in the USD/INR. 

? Sharper-than-expected rise in WPI in November 2025: An unfavorable base, and rising prices of primary food articles and minerals led to sharper-than-anticipated narrowing of deflation to 0.3% YoY in November 2025 (ICRA exp.: -0.6%) from 1.2% in October 2025. 

? Deflation in food index halved to 2.6% YoY in November 2025 from a series-low level of 5% in October 2025: The uptick in the food segment was on account of primary food articles (to -4.2% from -8.3% in October 2025.

EXHIBIT: YoY deflation in headline WPI narrowed to 0.3% from 1.2% in Oct 2025; while core-WPI inflation remained unchanged at 1.5%, despite a favorable base (amid elevated global commodity prices)

Source: Office of the Economic Advisor, Ministry of Commerce and Industry, GoI; ICRA Research