India's headline inflation stood at 0.11% in December 2014 as compared to zero percent in the previous month. It came below market expectations of 0.3%. October WPI revised to 1.66% from 1.77%.

Commenting on the inflation number, Sonal Varma, economist at Nomura Financial Advisory and Securities, said, ''Looking ahead, we expect WPI inflation to remain benign through 2015, averaging -0.9% y-o-y compared to 4.2% in 2014, led by; lower global commodity prices; lower domestic agricultural prices due to the moderation in rural wage inflation and substantially lower increase in minimum support prices. The current bout of low to negative WPI inflation is largely supply-side driven and thus is not an indicator of weak demand. We expect the sharp fall in input costs to boost corporate profit margins in 2015 and act as a tailwind to India's growth recovery."

Dinesh Thakkar, chairman & managing director, Angel Broking said, "WPI came in at 0.11% for the month of December 2014 as compared to 0% in previous month, continuing its trend of close to 0%. Inflation in manufactured products declined to 1.57% in the current month as compared to 2.04% in November 2014 due to low demand. Lower crude oil prices globally aided in fall in petrol and high speed diesel prices by 11.96% and 6.31% respectively, and going forward, fuel prices are expected to be lower due to continuing drop in crude oil prices. In the near future, we expect inflation to be structurally lower on account of lower crude oil prices and broader interest rates to fall atleast by 100bp over next 12 months, which would be one of the key catalysts for economic growth going forward."

Upasna Bhardwaj, economist, ING Vysya Bank said, "After the retail inflation data, today's WPI print further reinforces the disinflationary pressures which will help RBI achieve its target of 6% by Jan 2016. While definitely the probability of February rate cut has increased we continue to believe that RBI will wait for the Budget and then begin easing in March/April."

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