Inflation – India’s Wholesale Price Growth Accelerates Amid Rising Energy Costs
Inflation – India’s wholesale inflation recorded a notable increase in May 2026, reflecting higher costs across energy, manufacturing, and food-related sectors. Fresh data released by the Ministry of Commerce & Industry showed that wholesale price inflation climbed to 9.68 percent year-on-year during the month, compared with 8.26 percent in April.
The latest figures indicate that the Wholesale Price Index (WPI) for all commodities reached 109.9 in May, up from 108.8 in the previous month. The rise points to continued price pressures across several key segments of the economy.
Energy Segment Drives Inflation Increase
A significant contributor to the overall inflation rise was the fuel and power category. Inflation within this segment surged to 30.33 percent in May, marking a substantial jump from 24.89 percent recorded a month earlier. The increase highlights the growing impact of energy-related costs on the broader wholesale market.
Manufacturing activity also experienced stronger price growth. Inflation for manufactured products stood at 7.48 percent, compared with 6.68 percent in April, indicating that producers faced higher input and production expenses.
Food and Primary Commodities Register Higher Prices
Primary articles, which include essential raw materials and agricultural products, witnessed inflation of 4.99 percent during May. This was higher than the 3.78 percent rate reported in April.
Similarly, the wholesale food index, covering both unprocessed food items and processed food products, rose to 4.49 percent from 3.11 percent in the preceding month. The increase suggests broader price movements across the food supply chain.
Government Introduces Updated Price Measurement System
Alongside the inflation data, authorities announced a major overhaul of wholesale price measurement. The Office of Economic Adviser under the Department for Promotion of Industry and Internal Trade (DPIIT) is introducing a revised WPI series with 2022-23 as the new base year, replacing the earlier 2011-12 benchmark.
The updated framework will also introduce additional indicators designed to provide a more detailed picture of producer-level inflation. These include the Output Producer Price Index (OPPI), a trial Input Producer Price Index (IPPI) for manufacturing industries, and a Service Producer Price Index covering seven major service sectors.
Transition Towards Global Standards
According to the ministry, the existing WPI will continue to be published alongside the Producer Price Index framework for a five-year transition period. This approach is intended to help businesses and institutions gradually move from WPI-based references to the newer system.
Officials stated that the revised structure aligns India’s inflation tracking practices with internationally accepted standards and recommendations supported by the International Monetary Fund.
Expanded Commodity Basket and Methodology Changes
The modernization effort also brings a substantial expansion in the number of products tracked. The commodity basket under the revised WPI has increased from 697 items to 957 items, allowing broader coverage of economic activity.
In another important change, crude petroleum and natural gas have been shifted into the fuel and power category, improving consistency in monitoring energy price movements.
The ministry has also updated the calculation methodology by adopting a short-term formulation approach. Additionally, weight allocation will now be based on Gross Value of Output rather than Net Traded Value.
Guidance on Historical Comparisons
Officials advised users to exercise caution when comparing historical and future data because the revised series includes new products while removing outdated items. To maintain continuity between datasets, linking factors have been established across major categories, including all commodities, primary articles, fuel and power, and manufactured products.
The ministry noted that provisional readings for WPI, OPPI, and the trial IPPI will be released on the 14th day of the month following the reference period, ensuring regular updates on producer-level price trends.