In October, WPI inflation dropped to 8.39%, a 19-month low, thanks to a strong foundation

According to figures provided by the commerce ministry on November 14, India's wholesale price index-based inflation plunged to a 19-month low of 8.39 percent in October.

Additionally, after remaining above 10% for the previous 1.5 years, WPI inflation has now dropped to single digits for the first time in 19 months.

Inflation measured by the WPI was 10.7% in September and 13.83% in October of the following year.

The substantial drop in WPI inflation in October was due to lower fuel and manufactured goods prices as well as a favourable base impact.

Prices for manufactured goods decreased to 4.42 percent from 6.34 percent, while fuel and electricity inflation decreased by almost a third to 23.17 percent from 32.61 percent in September.

Given that manufactured goods make up approximately two-thirds of the WPI basket, the decline in inflation of these goods is crucial.

The food index rose in October while those for the "fuel and power" and "manufactured items" groupings decreased month over month. Despite this, the cost of food decreased nonetheless, from 8.08 percent to 6.48 percent, mainly to a favourable base effect.

The WPI's all-commodity index, which had sequentially fallen in July, August, and September, increased by 0.3 percent on a month-over-month basis overall in October.

The statistics ministry released its data on the more closely watched retail inflation hours before the wholesale inflation figures were made public.

The government will make available the October Consumer Price Index (CPI) data at 5.30 p.m. According to a Moneycontrol poll, CPI inflation likely decreased from 7.41 percent in September to 6.7 percent.

Policymakers will be relieved to see a decline in headline retail inflation following a significant decline in wholesale inflation, even though the Reserve Bank of India (RBI) has already failed to achieve its inflation mandate, with average CPI inflation remaining outside the tolerance range of 2–6 percent for three consecutive quarters.

The central bank, however, is unlikely to diverge considerably from the course it has set out to reduce inflation in light of the statistics, as experts anticipate another increase in the repo rate in December.

In the past six and a half months, the RBI increased the repo rate by an astounding 190 basis points, bringing it to 5.9 percent. From December 5 to 7, its monetary policy committee will meet.