India released a new Wholesale Price Index (WPI) on Monday, shifting the base year from 2011-12 to 2022-23. The move was accompanied by the release of Producer Price Indices (PPI), which will eventually replace WPI, in line with international standards.
The WPI showed a 6.60% increase in wholesale prices between February 2026 and May 2026, with half of this inflation coming from the fuel and power category. This underlines the war's inflationary shock on the Indian economy.
On a year-on-year basis, WPI growth has increased sharply from 2.18% in February to 3.98%, 8.26%, and 9.68% in March, April, and May 2026, respectively.
The revised WPI 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.
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.
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.
