India's wholesale inflation surges to 9.68% in May on rising costs

India's wholesale price inflation (WPI) rose sharply to 9.68% YoY in May 2026 from 8.26% in April, driven by rising energy and manufacturing costs. The government is also launching a revised WPI series and will transition to a PPI framework.

Wholesale Inflation Surges to 9.68% in May

India's wholesale price inflation rose sharply to 9.68 per cent on a year-on-year (YoY) basis in May 2026, driven primarily by rising energy and manufacturing costs. According to the Ministry of Commerce & Industry, the annual rate of inflation stood at 8.26 per cent in April 2026.

The wholesale price index for all commodities reached 109.9 in May, rising from 108.8 in the preceding month. The quickening pace of price gains was visible across all major commodity segments.

Year-on-year inflation for fuel and power surged to 30.33 per cent in May from 24.89 per cent in April, while manufactured products inflation climbed to 7.48 per cent from 6.68 per cent.

Primary articles registered an inflation rate of 4.99 per cent during the month, up from 3.78 per cent in April. The wholesale food index, which tracks both raw food articles and processed food products, rose 4.49 per cent in May compared to 3.11 per cent in April.

India to Revamp Price Indices, Transition to PPI

The Office of Economic Adviser under the Department for Promotion of Industry and Internal Trade (DPIIT) is releasing a revised series of the Wholesale Price Index (WPI) with a new base year of 2022-23 to replace the older 2011-12 series. At the same time, the ministry is introducing new price trackers, including the Output Producer Price Index, a trial Input Producer Price Index for the manufacturing sector, and a Service Producer Price Index spanning seven major service sectors.

Transition Timeline and Rationale

"Considering the wide usage of WPI in price escalation clauses, this index will be released for five years from the date of its release, along with PPI, and will be discontinued thereafter," the Ministry of Commerce & Industry stated.

The Ministry noted that this timeline provides "sufficient time to users to switch from WPI to PPI."

Under the modernized framework, the item basket for the WPI series expands from 697 to 957 items.

Provisional indices of WPI, OPPI, and trial IPPI for a reference month will be released on the 14th of the following month.

The ministry added that the transition from WPI to PPI aligns domestic indicators with global best practices and standard recommendations of the International Monetary Fund.

Advantages of the Dual PPI System

"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," the document stated.

The government report added that the dual indices also explain "how inflation experienced by producers on inputs are passed on to the output being produced."

Methodological Updates and Data Continuity

The computation methodology updates to a short-term formulation method, and the weights are now derived using the Gross Value of Output instead of Net Traded Value. Furthermore, crude petroleum and natural gas have been relocated from primary articles to the fuel and power group to ensure a coherent structure for tracking energy prices.

The Ministry of Commerce & Industry cautioned users regarding historical comparisons, noting that the item basket underwent significant changes at lower levels of disaggregation due to the inclusion of new items and the removal of obsolete ones. To facilitate data continuity, the ministry fixed the tracking linking factor for all commodities at 1.53, while primary articles stand at 1.71, fuel and power at 1.65, and manufactured products at 1.44. (ANI)

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