India on Monday released a new wholesale price index (WPI), which changed the base year from 2011-12 to 2022-23. Along with this, Producer Price Index (PPI) was also released, which will eventually replace WPI in keeping with international standards.
India’s wholesale prices rose 6.60% between February 2026 and May 2026, the latest period for which inflation data is available, the last month before the war broke out in West Asia. Half of this inflation came from the fuel and power category, underscoring the inflationary shock of the war on the Indian economy. On a year-on-year basis, the wholesale price index (WPI) growth has increased from 2.18% in February to 3.98%, 8.26% and 9.68% in March, April and May 2026, respectively.
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While the WPI numbers were released on the same day as the US-Iran deal, analysts do not see price pressures easing any time soon, even after they have peaked. This is because it will take time for traffic through the Strait of Hormuz to normalize and pent-up demand could put pressure on the oil market.
The Ministry of Commerce and Industry on Monday released the first data print for the new series of WPI. The revised series is based on 2022-23 and promises better coverage of prices by tracking 957 individual commodities instead of 697 of its predecessor. It also changed the category-wise classification by shifting commodities like crude petroleum and natural gas to the fuel and power category from their previous classification as primary commodities.
The fuel category also includes energy derived from renewable sources. To be sure, manufactured goods remain the mainstay of the current WPI basket as in the previous series.
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May 2026 was the seventh consecutive month of rising inflation in the new series which includes monthly data through April 2023. The monthly inflation readings for March, April and May 2026 have been the highest ever in the new WPI series. The main reason for the increase in inflation is fuel price inflation. The numbers show this clearly. Inflation of primary products increased from 1.64% to 4.99% between February and May. For manufactured goods the numbers stood at 3.61% and 7.48% respectively, but for the fuel and power category there was a contraction of 3.37% and growth of 30.33%.
The WPI food index, which combines food items and manufactured food products, rose 4.49% from a year ago, compared with 3.11% in April. Within the fuel group, mineral oil inflation stood at 49.82% in May, while crude petroleum and natural gas rose by 61.51% from a year ago.
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An even bigger change than the revision of the WPI series was the roll-out of three producer price indices (PPIs): output PPI, input PPI and services PPI. The output PPI measures the prices received by producers for their output, excluding net taxes and trade and transportation margins. In May, the output PPI of all goods increased to 109.6 from 108.6 in April. Meanwhile, the tested input PPI, which is currently limited to manufacturing, tracks prices paid by industries for inputs. The index remained unchanged at 104.9 from April to May but is higher than 100.9 in March. Services PPI will be released quarterly.