Update on Revised WPI & New Producer Price Indices (PPIs) by CareEdge Ratings
The base year for India’s Wholesale Price Index (WPI) has been revised to 2022-23 from 2011-12. Beyond the base year revision, the updated WPI series expands item coverage to 957 from 697 previously and incorporates several methodological enhancements (Refer to Table 2 for additional details). In addition to the WPI, the government has also launched the Producer Price Indices (PPIs) for the first time – covering output PPI, trial input PPI, and a services PPI (Refer to Table 3 for additional details).
The WPI inflation as per the revised series with base year 2022-23, accelerated to a higher-than-expected 9.7% in May 2026 from 8.3% in the previous month. While there has been an uptick in inflation across all major groups, this increase is notable for fuel & power and manufactured goods. This reflects the impact of the West Asia crisis on wholesale prices. Within fuel & power, inflation was mainly driven by strong price acceleration in crude petroleum & natural gas and mineral oils. Prices in the electricity group stayed in the deflationary zone. Within manufacturing, double-digit inflation continued for the second month in a row in case of chemicals & chemical products (13.4% in May Vs 12.2% in April) as well as basic metals (12.3% Vs 10.6%). These together have a weight of 14.5% in the overall WPI inflation.
In addition to the WPI, the government has also launched the Producer Price Indices (PPIs) for the first time. In line with the WPI inflation, the output PPI increased to 9.4% in May 2026 from 8.1% in April. Most heads of services PPI remained benign in Q4 FY26 reflecting the fact that the current surge in inflationary pressures is supply driven and not demand driven (Refer to Exhibit 2). Overall, the introduction of the output PPI, trial input PPI, and the services PPI is a positive step towards aligning the domestic price indices with the global practices.
Exhibit 1: Trends in WPI Inflation
Exhibit 2: Inflation Across Categories of Services PPI
Table 1: Components of WPI Inflation
Way Forward With the positive developments around the West Asia conflict, global energy prices have seen significant cooling. However, the situation remains fluid despite the recent developments. So far, OMCs and the government have absorbed much of the rise in crude prices, however the future trajectory of domestic crude oil prices will depend on the evolving global factors. Additionally, concerns around a higher probability of an El Niño event this year pose upside risks to food inflation. Against this backdrop, we expect WPI inflation to average around 7.8% in FY27 assuming Brent crude oil prices average around USD 90/bbl.
Table 2: Key Revisions in the Revised WPI Series (Base Year – 2022-23)
Table 3: Key Updates on the Producer Price Indices
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