India’s Wholesale Price Index Inflation Rises to a 10-month high at 1.81% in Jan 2026

India’s wholesale inflation, measured by the Wholesale Price Index (WPI), rose to 1.81% in January 2026, the highest level in 10 months, according to data released by the Commerce Ministry on February 16.

The figure shows a sharp increase from 0.83% in December, representing the fastest pace since March 2025.

The rise was primarily driven by higher food and beverage prices and increases in manufactured-goods prices.

Key Drivers Behind India’s WPI (Wholesale Price Index) Inflation Spike

The Wholesale Price Index tracks price changes at the producer level across three major categories:

1. Primary Articles (22.62% Weight)

Inflation in this segment rose sharply from 0.21% to 2.21%

The food index moved from -0.43% to 1.55%, led by higher prices of:

• Grains
• Wheat
• Vegetables

Non-food items, such as oilseeds and minerals, also added to the pressure.

2. Fuel and Power (13.15% Weight)

Fuel inflation remained in deflation at -4.01%, compared to -2.31% in December.

While fuel prices provided some relief, they were not enough to offset rising food and manufacturing costs.

3. Manufactured Products (64.23% Weight)

Inflation in manufactured products rose from 1.82% to 2.86%.

Higher prices of basic metals, chemicals, plastics, and rubber contributed significantly to the overall increase in wholesale inflation.

WPI vs CPI: Difference Between the Two Inflation Indicators

India tracks inflation using two main indicators, the Wholesale Price Index (WPI) and the Consumer Price Index (CPI). While both measure price changes, they capture inflation at different stages of the economy.

Wholesale Price Index (WPI)

It measures price changes at the wholesale or producer level. It reflects the prices businesses pay before goods reach consumers. 

In this index, manufactured goods carry the highest weight at 64.23%, which means changes in factory output prices have a strong impact on overall wholesale inflation. 

When WPI rises, it usually indicates that input costs for businesses are increasing.

Consumer Price Index (CPI)

It measures retail prices paid directly by consumers. It reflects household expenses such as food, housing, and daily essentials. 

Food accounts for the largest share of the CPI at 45.86%, making it highly sensitive to changes in grocery prices.

In January, retail inflation rose to 2.75% from 1.33% in the previous month. When wholesale prices increase, businesses often pass on higher costs to consumers over time. This is why a rise in WPI can sometimes lead to a higher CPI in subsequent months.

What is the Impact of Rising Wholesale Inflation on the Economy?

The rise in India’s wholesale inflation indicates growing input cost pressures.

• For Consumers: Higher wholesale food prices can gradually push up retail grocery bills.
• For Businesses: Manufacturers face higher raw material costs, which can compress margins.

Sustained wholesale inflation may influence the Reserve Bank of India’s interest rate stance, especially if food prices remain elevated.

Conclusion

January’s rise in India’s wholesale inflation signals that input cost pressures are building again, particularly from food and manufactured goods. While fuel prices remain in deflation, the rebound in vegetable and metal prices has pushed the WPI higher after a softer December print.

If food prices remain elevated and global commodity trends stay firm, wholesale inflation could continue to influence retail prices in the coming months.

Source: https://english.dainikjagranmpcg.com/

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