Wholesale inflation drops to 1.34% in March, lowest in 29 months

However, the zero month-on-month change in the all-commodity index of the WPI was despite two of the major groups posting sequential declines.

In March, the index of the 'fuel and power' group was 1.3 percent lower from February, while that of manufactured products was down 0.3 percent. But these two downward movements were cancelled out by a 1.2 percent month-on-month gain in the index of primary articles.

Within primary articles, the biggest sequential price gainers were minerals (up 8.2 percent), crude petroleum (6.8 percent), vegetables (up 5.5 percent), and fruits (up 3.8 percent).

While the Reserve Bank of India's (RBI) policy target is not spelt out in terms of WPI inflation, it is a key input in monetary policymaking as it influences retail prices.

Earlier this month on April 6, the RBI's Monetary Policy Committee surprised markets by leaving the repo rate unchanged at 6.5 percent despite expectations of a 25-basis-point rate hike.

One basis point is one-hundredth of a percentage point.

While the MPC has maintained that it will take policy action in upcoming meetings should the need arise, economists widely think the rate-setting panel's hiking cycle has come to an end.