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4d ago

India’s Wholesale Inflation Rises to 9.68% as Energy Shock Pushes Producer Prices Higher

Elevated imported crude prices prompted the central bank to raise its FY27 consumer inflation forecast to 5.1%.

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TOPSHOT - Cars and other vehicles for export are seen at a port in Yantai, in eastern China's Shandong province on April 3, 2025. China on April 3 said it was "maintaining communication" with the United States over economic and trade issues after Washington announced swingeing new tariffs. (Photo by CN-STR / AFP via Getty Images) / China OUT
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The Hong Kong-flagged crude oil tanker New Corolla unloads cargo in the Marathon Petroleum terminal at the Port of Long Beach in Long Beach, California, US, on Thursday, May 7, 2026. The New Corolla loaded up in Iraq on Feb. 24, just days before US and Israeli forces launched attacks on Iran, plunging the region into turmoil and sparking a double blockade of commercial shipping, reported the Los Angeles Times. Photographer: Tim Rue/Bloomberg via Getty Images

Overview

  • The Commerce and Industry Ministry published the first WPI reading under the revised 2022–23 base on June 15 showing wholesale inflation at 9.68% year on year.
  • Fuel and power was the main driver, with that group up about 30.3% and crude petroleum and natural gas inflation near 61.5%, reflecting a sharp pass-through from higher imported oil.
  • The government simultaneously launched Producer Price Indices (PPI) and will publish WPI alongside PPI for a five-year transition as it moves weights to Gross Value of Output and adopts a chain-based short-term method.
  • Higher factory-gate costs pushed manufactured goods inflation to 7.48% in May, lifting prices in chemicals, basic metals and textiles and prompting the RBI to lift its FY27 CPI projection to 5.1%.
  • Near-term inflation risks remain high because India imports roughly 88% of its crude, recent diplomatic progress that cut Brent back toward $83 a barrel could ease pressure in June, and weather risks such as a weak monsoon or El Niño could push food prices higher.