WPI inflation surges to 9.68% in May as Centre slowly introduces the new price index regime
Fuel and Power category saw a year-on-year inflation of 30.33 per cent on account of the West Asia conflict
India's wholesale inflation saw a significant increase to 9.68% in May 2026, up from 8.26% in April, primarily driven by a substantial surge in energy prices, with Fuel and Power inflation reaching 30.33% due to global oil price volatility impacting mineral oils and crude petroleum. Concurrently, the government has implemented its most extensive overhaul of price measurement in over a decade by revising the Wholesale Price Index (WPI) base year to 2022-23 and expanding the number of tracked items, while also introducing new Producer Price Indices (PPI) for output, input, and services, aiming to provide a more nuanced economic picture and align with international standards.
India's wholesale inflation saw a significant increase to 9.68% in May 2026, up from 8.26% in April, primarily driven by a substantial surge in energy prices, with Fuel and Power inflation reaching 30.33% due to global oil price volatility impacting mineral oils and crude petroleum. Concurrently, the government has implemented its most extensive overhaul of price measurement in over a decade by revising the Wholesale Price Index (WPI) base year to 2022-23 and expanding the number of tracked items, while also introducing new Producer Price Indices (PPI) for output, input, and services, aiming to provide a more nuanced economic picture and align with international standards.
India's wholesale inflation saw a significant increase to 9.68% in May 2026, up from 8.26% in April, primarily driven by a substantial surge in energy prices, with Fuel and Power inflation reaching 30.33% due to global oil price volatility impacting mineral oils and crude petroleum. Concurrently, the government has implemented its most extensive overhaul of price measurement in over a decade by revising the Wholesale Price Index (WPI) base year to 2022-23 and expanding the number of tracked items, while also introducing new Producer Price Indices (PPI) for output, input, and services, aiming to provide a more nuanced economic picture and align with international standards.
India's wholesale inflation climbed sharply to 9.68 per cent in May 2026, up from 8.26 per cent in April, driven by a surge in energy prices, even as the Centre simultaneously unveiled its most significant overhaul of price measurement in over a decade.
The Fuel and Power category, which includes crude petroleum, natural gas, and mineral oils, saw year-on-year inflation of 30.33 per cent in May, sharply up from 24.89 per cent in April, according to provisional government data.
Mineral oils alone posted a 49.82 per cent annual rise, and crude petroleum and natural gas surged 61.51 per cent year-on-year, a direct consequence of global oil price volatility driven by the West Asia conflict that dominated markets through much of April and May.
Manufactured products, the largest component of WPI with a weight of over 63 per cent, rose 7.48 per cent, while primary articles inflation stood at 4.99 per cent. Food inflation within WPI climbed to 4.49 per cent, up from 3.11 per cent in April.
Base year changed to 2022-23
The Office of Economic Adviser under DPIIT recently replaced the WPI's 2011-12 base year with a new 2022-23 base year, the first such revision in over 14 years. The updated series expands the number of items tracked from 697 to 957, incorporates solar and wind energy and nuclear electricity into the index basket for the first time, and moves crude petroleum and natural gas out of "Primary Articles" into the more logical "Fuel and Power" group.
The Centre is simultaneously launching new Producer Price Indices (PPI), covering Output PPI, a trial Input PPI for the manufacturing sector, and Service PPIs for seven sectors: banking, securities transactions, insurance, management of pension funds, railways, air passenger services, and telecom.
The transition from WPI to PPI aligns India with global best practices recommended by the IMF and gives analysts a far more nuanced picture of the economy. Output PPI tracks what producers earn for their goods and the new Input PPI tracks what they pay for raw materials, revealing exactly how much cost pressure is being absorbed within industry versus passed on to buyers.
The old WPI series will run in parallel for five years before being phased out entirely, giving businesses and policymakers time to recalibrate their escalation clauses and contractual frameworks.