India's Wholesale Inflation Hits A Record High Of 9.68%
The increase in prices, however, came during the third month of disruptions linked to the West Asia conflict, although concerns eased somewhat after the US and Iran agreed to a ceasefire, helping stabilise global energy markets. However, the May month rise in wholesale prices, no doubt, will reflect the impact of energy shocks emanating from the Gulf war
New Delhi: Driven mainly by higher fuel prices, manufactured products and primary articles, India's wholesale inflation accelerated further in May, rising to a record 9.68 per cent from 8.26 per cent in April. Fuel and power inflation remained the biggest contributors to the rise in the country's wholesale prices in the month of May, the government said on Monday.
The increase in prices, however, came during the third month of disruptions linked to the West Asia conflict, although concerns eased somewhat after the US and Iran agreed to a ceasefire, helping stabilise global energy markets. However, the May month rise in wholesale prices, no doubt, will reflect the impact of energy shocks emanating from the Gulf war.
As per the commerce ministry, the May wholesale price index or WPI-based inflation is the highest in the current series with a base year of 2022-23. “The May WPI-inflation data, revising the base year to 2022-23, from 2011-12 earlier -- the first revision in nine years,” said the ministry.
The ministry also said that the total number of items in the new WPI basket has increased from 697 to 957. “New sources of energy, such as solar and wind, have been added under the 'electricity' group. In addition, nuclear electricity has been included in the basket,” it said.
The ministry also released the producer price indices (PPI) for the first time to track output and input factory gate prices. Besides, services PPI were released for seven services such as banking, securities transaction, pension funds management, insurance, railways, air (passenger), and telecom.
The government, however, intends to discontinue with WPI data in the next five years and shift to PPI, in alignment with the global best practice. “Availability of both the Output PPI and Input PPI gives a better understanding of the price movements of output produced vis-a-vis inputs being used in an industry. It also explains how inflation experienced by producers on inputs is passed on to the output being produced,” the ministry said.
“Across the groups, mineral oil (containing petroleum products), crude petroleum and natural gas, manufacture of chemicals and chemical products, and manufacture of basic metals have been major drivers of WPI inflation in April and May 2026,” the ministry said.
The fuel and power segment, which now accounts for 14.1 per cent of the WPI by weight and also includes the crude petroleum and natural gas groups, witnessed a sharp rise in the inflation rate to 30.33 per cent in May, from 24.89 per cent in April 2026, reflecting the continued passthrough of elevated global energy prices.
As per the data, inflation in crude petroleum was 61.51 per cent in May, as against 56.31 per cent in the previous month. The sharp rise in WPI inflation reflects the impact of the West Asia crisis and the effective blockade of the Strait of Hormuz, through which the majority of the crude oil is imported to India, and its spillover effect on food prices. “Inflation in food articles was 3.60 per cent in May, compared to 2.43 per cent in April. In manufactured products, inflation rose to 7.48 per cent in May, from 6.68 per cent during April,” the data showed.
While reacting to high WPI inflation at 9.68 per cent, Saurabh Sanyal, secretary general, Assocham said that this is only short-lived as this is mainly caused by the prices of petroleum products and other international commodities. “As the USA and Iran are in a peace deal, and international crude oil prices have corrected significantly to the level of $83 per barrel in the international market and are expected to decrease further. The positive impact on the inflation trajectory is expected in the coming months,” said Sanyal.
Expecting a better WPI print in next month, Icra principal economist Rahul Agrawal also said that the recent cooling in global energy and commodity prices after the easing of tensions in West Asia is expected to provide respite to the WPI inflation print for June 2026.
