India released a new Wholesale Price Index (WPI) on Monday that shifted the base year from 2011-12 to 2022-23. It was accompanied by a release of Producer Price Indices (PPI) that will eventually replace WPI, in keeping with international standards.
India’s wholesale prices increased by 6.60% between February 2026, the last month before the war in West Asia began, and May 2026, the latest period for which inflation data is available. Half of this inflation came from the fuel and power category, which underlines the war’s inflationary shock on the Indian economy. On a year-on-year basis, Wholesale Price Index (WPI) growth has increased sharply from 2.18% in February to 3.98%, 8.26% and 9.68% in March, April and May 2026.
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While the WPI numbers were released on the same day as the announcement of a US-Iran deal, analysts do not see price pressures easing soon, even though they may have peaked. This is because normalisation of traffic from the Strait of Hormuz would take time and pent-up demand might exert pressure on the oil market.
The ministry of commerce and industry released the first data print for the new series of WPI on Monday. The revised series has 2022-23 as the base and promises better coverage of prices by tracking 957 individual items instead of 697 by its predecessor. It also tweaked category-wise classification by moving commodities such as crude petroleum and natural gas from their previous classification as primary articles to the fuel and power category.
The fuel category also includes energy from renewable sources. To be sure, manufactured goods continue to be the mainstay of the current WPI basket like the previous series.
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May 2026 was the seventh consecutive month of rising inflation in the new series which has monthly data from April 2023 onwards. Monthly inflation readings for March, April and May 2026 have been the highest ever readings in the new WPI series. Bulk of the inflationary surge is on account of fuel price inflation. The numbers show it clearly. Inflation for primary products increased from 1.64% to 4.99% between February and May. This number was 3.61% and 7.48% respectively for manufactured goods but a contraction of 3.37% and a surge of 30.33% for the fuel and power category.
The WPI food index, which combines food articles and manufactured food products, increased 4.49% from a year earlier, compared with 3.11% in April. Within the fuel group, mineral oils inflation in May was 49.82%, while crude petroleum and natural gas rose 61.51% from a year earlier.
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An even bigger change than the revision of the WPI series was the roll-out of three Producer Price Indices (PPI): output PPI, input PPI and services PPI. Output PPI measures prices received by producers for their output, excluding net taxes and trade and transport margins. In May, the output PPI for all commodities rose to 109.6 from 108.6 in April. Meanwhile, trial input PPI, currently limited to manufacturing, tracks prices paid by industries for inputs. This index stood unchanged at 104.9 in May from April but higher than 100.9 in March. The services PPI will be released quarterly.
