India’s WPI Manufacturing YoY Slows Sharply in November 2025: Implications and Outlook
The latest WPI Manufacturing YoY for India came in at 1.54% for November 2025, down from 2.33% in October and below the 1.90% consensus estimate. This marks the slowest pace since February 2025, signaling easing inflationary pressures in the manufacturing sector. Key drivers include subdued commodity prices and moderating demand amid tighter monetary policy. The print suggests a cautious macro outlook with mixed signals from fiscal stimulus and external risks. Market reaction was muted but hints at a potential pause in rate hikes. Structural trends point to gradual normalization after pandemic disruptions, though geopolitical tensions and global supply chain uncertainties remain downside risks.
Table of Contents
The Wholesale Price Index (WPI) Manufacturing YoY for India registered a 1.54% increase in November 2025, marking a significant deceleration from 2.33% in October and well below the 1.90% consensus forecast. This figure is the lowest since February 2025’s 2.51%, reflecting easing inflationary pressures in the manufacturing sector amid a complex macroeconomic environment.
Drivers this month
- Commodity prices, especially metals and energy, declined by 3.20% MoM, easing input costs.
- Domestic demand softened due to tighter credit conditions and cautious consumer spending.
- Supply chain normalization post-pandemic reduced cost-push inflation.
Policy pulse
The Reserve Bank of India’s (RBI) recent monetary tightening, including a 25 bps hike in the repo rate in October, is beginning to temper inflation. The WPI reading aligns with the RBI’s inflation target range of 4% CPI, suggesting manufacturing inflation is cooling but core inflation remains sticky.
Market lens
Immediate reaction: The INR/USD pair strengthened 0.15% in the first hour post-release, reflecting improved inflation outlook. Short-term bond yields eased by 5 bps, signaling reduced inflation risk premium.
The WPI Manufacturing YoY figure is a critical gauge of inflation at the factory gate, influencing pricing power and input costs across the economy. The 1.54% rise in November contrasts with the 12-month average of 2.44%, underscoring a notable slowdown in inflationary momentum.
Monetary Policy & Financial Conditions
RBI’s monetary stance has been hawkish since mid-2025, with cumulative rate hikes totaling 125 bps since April. The cooling WPI suggests these measures are effective in curbing inflation. Financial conditions have tightened, with credit growth slowing to 9.10% YoY in October from 11.30% in June.
Fiscal Policy & Government Budget
The government’s fiscal deficit target of 6.40% of GDP for FY26 remains on track, with moderate stimulus focused on infrastructure and manufacturing incentives. However, fiscal prudence limits aggressive spending, which tempers demand-side inflationary pressures.
External Shocks & Geopolitical Risks
Global commodity prices have softened due to easing supply chain bottlenecks and lower demand from China. However, geopolitical tensions in the Indo-Pacific region and persistent energy market volatility pose upside risks to inflation.
Drivers this month
- Energy prices contracted 4.10% MoM, reducing input costs.
- Manufactured metals prices fell 2.80% MoM, reflecting global oversupply.
- Food processing inflation remained stable at 1.20% YoY, limiting overall WPI impact.
This chart highlights a clear downward trend in manufacturing inflation, reversing the two-month rise seen in September and October. The data suggests that inflationary pressures are abating, which may ease the RBI’s policy tightening path and support stable growth.
Market lens
Immediate reaction: INR strengthened modestly post-release, while 2-year government bond yields declined by 5 basis points, reflecting market expectations of a possible pause in rate hikes. Equity markets showed mild gains in manufacturing-heavy sectors.
Looking ahead, the WPI Manufacturing inflation trajectory will be shaped by domestic demand, global commodity trends, and policy responses. The current print suggests a base case of continued moderate inflation around 1.50-2.00% YoY in coming months.
Scenario analysis
- Bullish (30% probability): Inflation falls below 1.20% YoY by Q1 2026 due to sustained commodity price declines and stronger fiscal stimulus, supporting growth acceleration.
- Base (50% probability): Inflation stabilizes near 1.50-2.00%, with RBI maintaining current policy stance and gradual demand recovery.
- Bearish (20% probability): Inflation rebounds above 2.50% due to geopolitical shocks or supply chain disruptions, forcing tighter monetary policy and slowing growth.
Policy pulse
RBI is likely to adopt a wait-and-see approach in the near term, balancing inflation control with growth concerns. Fiscal policy may lean towards targeted support for manufacturing and exports to offset external headwinds.
Market lens
Financial markets will closely monitor WPI trends alongside CPI data. A sustained decline in manufacturing inflation could ease pressure on bond yields and support the INR, while equity markets may benefit from stable input costs.
India’s November 2025 WPI Manufacturing YoY slowdown to 1.54% signals easing inflation pressures amid a tightening monetary environment and cautious fiscal stance. While this reduces near-term inflation risk, external uncertainties and structural factors warrant vigilance. The RBI’s calibrated approach and government’s targeted fiscal measures will be key to sustaining growth without reigniting inflation. Market participants should watch commodity prices, geopolitical developments, and domestic demand trends for clues on the inflation trajectory.
Key Markets Likely to React to WPI Manufacturing YoY
The WPI Manufacturing YoY is closely tracked by markets sensitive to inflation and growth signals. The following tradable symbols historically correlate with this indicator’s movements:
- NSEI – India’s benchmark stock index, sensitive to manufacturing sector performance and inflation expectations.
- USINR – USD/INR currency pair, reacts to inflation data influencing RBI policy and capital flows.
- BTCUSD – Bitcoin, often viewed as an inflation hedge, showing inverse correlation during inflation shocks.
- RELIANCE – Major Indian conglomerate with significant manufacturing exposure, impacted by input costs.
- EURINR – Euro/INR pair, reflecting broader currency sentiment and inflation differentials.
WPI Manufacturing vs. NSEI Since 2020
A comparative analysis since 2020 shows a positive correlation between WPI Manufacturing inflation and NSEI returns. Periods of rising WPI inflation often coincide with increased input costs, pressuring corporate margins and dampening equity performance. Conversely, easing inflation supports market rallies, as seen in the post-pandemic recovery phases.
FAQs
- What is WPI Manufacturing YoY?
- The Wholesale Price Index (WPI) Manufacturing YoY measures the year-over-year change in prices of manufactured goods at the wholesale level, indicating inflationary trends in the manufacturing sector.
- How does WPI affect India’s economy?
- WPI influences input costs, consumer prices, and monetary policy decisions, impacting economic growth, inflation control, and financial markets.
- Why is the November 2025 WPI Manufacturing reading important?
- It provides timely insight into inflation trends amid RBI’s tightening cycle and global uncertainties, guiding policy and market expectations.
Key takeaway: The November 2025 WPI Manufacturing YoY slowdown to 1.54% signals easing inflation pressures, supporting a cautious but stable macroeconomic outlook for India.
Sources
- Sigmanomics database, WPI Manufacturing YoY India, November 2025 release.
- Reserve Bank of India Monetary Policy Reports, 2025.
- Government of India Fiscal Data, FY26 Budget Estimates.
- International Energy Agency, Commodity Price Reports, 2025.
- Bloomberg Market Data, November 2025.
Key Markets Likely to React to WPI Manufacturing YoY
The WPI Manufacturing YoY is a critical inflation gauge influencing equity, currency, and crypto markets. Indian equities like NSEI respond to inflation-driven cost pressures. Currency pairs such as USINR and EURINR reflect RBI policy shifts tied to inflation data. The crypto market, represented by BTCUSD, often reacts inversely to inflation surprises. Large manufacturing firms like RELIANCE also see stock price movements linked to input cost changes.
WPI Manufacturing vs. NSEI Since 2020
Since 2020, the WPI Manufacturing YoY and NSEI index have shown a moderate positive correlation. Rising manufacturing inflation often signals cost pressures that weigh on corporate profits, leading to equity market volatility. Conversely, periods of easing WPI inflation, such as post-pandemic normalization phases, have coincided with equity rallies. This relationship underscores the importance of WPI data for equity investors focusing on India’s manufacturing sector.
FAQs
- What is WPI Manufacturing YoY?
- The Wholesale Price Index (WPI) Manufacturing YoY measures the annual percentage change in wholesale prices of manufactured goods, reflecting inflation trends in the sector.
- How does WPI impact monetary policy?
- WPI inflation influences central bank decisions on interest rates, as it signals cost pressures that can feed into consumer inflation and economic growth.
- Why did WPI Manufacturing inflation slow in November 2025?
- The slowdown was driven by lower commodity prices, subdued demand, and effective monetary tightening by the RBI.
Final takeaway: The November 2025 WPI Manufacturing YoY slowdown to 1.54% highlights easing inflation pressures, supporting a balanced policy outlook amid ongoing global uncertainties.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The November 2025 WPI Manufacturing YoY at 1.54% is down sharply from October’s 2.33% and below the 12-month average of 2.44%. This marks a reversal of the mild uptick seen in September (2.55%) and October, signaling a cooling trend in factory gate inflation.
Compared to the peak of 3.07% in April 2025, the current reading reflects easing cost pressures, particularly in raw materials and intermediate goods. The downward trajectory since mid-year aligns with RBI’s tightening cycle and subdued commodity prices.