Inflation in manufactured products was 5.13%, up from 4.24% in December.
Food inflation was -2.24% in January. Inflation in vegetables and potatoes was -20.82% and -22.04%, respectively, data released by the commerce and industry ministry showed.
“The sharp rise in the WPI inflation in January 2021 was led by manufactured non-food products (core items), fuel and power, and crude petroleum and natural gas, even as the primary food inflation eased,” said Aditi Nayar, principal economist at ICRA.
Official data released last week shower retail inflation, based on the consumer price index, was at a 16-month low of 4.06% in January.
“We expect the CPI inflation to have bottomed out in January 2021, with large upticks expected in the next two prints. This, combined with the anticipated hardening in the core-WPI inflation, reaffirms our view that there is no room for further rate cuts in this cycle,” Nayar said.
The Reserve Bank of India in its monetary policy decision on February 5, kept interest rates unchanged for the fourth consecutive meeting and said that the near-term inflation outlook has turned favourable.