The Producer Price Index, a wholesale inflation gauge that is being closely watched for tariff-related impacts, showed that price hikes slowed substantially in February.

India's wholesale inflation in February rose to 2.38% year-on-year, slightly above 2.31% in January as a slowing food price increase was offset by a narrower drop in fuel prices, government data released on Monday showed.

Core wholesale prices, which exclude volatile food and energy costs, declined by 0.1 per cent from January—marking the first monthly decrease since July. On a yearly basis, core prices rose 3.4 per cent, down from 3.8 per cent in January, indicating a gradual cooling of inflationary pressures.

While the overall producer price index came in flat, prices for goods increased by 0.3% in February, while services costs declined by 0.2%. On an annual basis, the PPI increased by 3.2%, down from 3.7% a month earlier. The flat reading for February beat expectations of economists, who had forecast an increase of 0.3% for the month.

India’s wholesale inflation rose to a two-month high of 2.38 percent in February from 2.3 percent in the previous month as a drop in food prices was offset by a spike in manufactured products. Positive rate of inflation in February,