Wholesale Price Index (WPI) of India

Fuel and power basket push wholesale prices to a four month high in October.

Published monthly by the Ministry of Commerce and Industry. Updated until October 2018. (Published on November 14, 2018) 
Note: WPI Food Index consists of ‘Food Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products. Core WPI represents non-food manufacturing.

Recent Data Trend

The wholesale level inflation as measured by Wholesale Price Index (WPI) rose to 5.3% year-on-year (YoY), highest since Jun'18. This comes in as a contrast to retail inflation which remained below the 4% mark in Oct'18. WPI based inflation was 5.13% YoY in Sep'18 and 3.6% YoY in Oct'17. Inflation based on wholesale prices saw an increase mainly due to a spike in petrol and diesel prices. The soaring global crude oil prices have surely aggravated inflation in India resulting in an inflation of more than 18% in the WPI fuel group.

With the tightening of global financial conditions in the form of rise in commodity prices, the input cost pressures have continued to remain high for businesses as seen in the Oct round of the Industrial Outlook Survey. This is reflected by the rising inflation in the manufacturing segment of WPI, which reached nearly a 4-year high of 4.5% YoY in Oct'18.

The food inflation as measured by the WPI Food index, which includes the food articles in the primary articles group saw softening of prices contracting by 0.6% YoY in Oct'18 from over 0.14% YoY in the pervious month.

Looking at the core inflation which stands at 5.1% YoY, the underlying inflationary trend in terms of global commodity prices and rising input costs of businesses has not lowered the inflationary pressures in India. Even the household survey by RBI depicts that median inflationary expectations are hardening. The risks to inflation continues to remain in the form of elevated crude oil prices. The higher crude oil prices have already pushed fuel inflation to a 19-month high of 18.4% in Oct'18.

Although at the retail level the headline inflation seems to be softening primarily because of food, however the underlying trend (core inflation) remains elevated and above RBI's inflation target of 4%. This is the reason why the RBI in its Oct policy meet had warned about risks attached to growth and inflation due to volatile oil prices and tightening of global financial conditions. But since the monetary policy mainly takes into account the headline inflation, we can expect it continue to maintain a status quo on the repo rate in the next meeting.

Brief Overview

Wholesale Price Index (WPI) represents the price of representative commodity basket of 697 items at the wholesale level, i.e. goods traded in bulk and between organizations, not the end consumers. It is a measure of inflation at the wholesale level. The significant components of WPI include Manufactured Products, Primary Articles, Fuel, and Power in the decreasing order of weight-age to the stated elements. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing, and construction. The WPI index helps in analyzing both macroeconomic and microeconomic conditions.

The WPI inflation has remained in the negative zone for the entire year of 2015 owing to the weak global prices of oil. The wholesale prices fell by 5.1% in August 2015, the highest fall of all time.

The  Office of the  Economic  Adviser in the  Department of  Industrial  Policy and Promotion,  Ministry of  Commerce  &  Industry is responsible for compiling  WPI and releasing it. Since 1947 the index is being regularly published. The latest series of WPI uses the base year as 2011-12. For more information, please visit the official website.  

Wholesale Price Index, Sub-group: Manufacturing

Wholesale Price Index, Sub-group: Primary Articles

Wholesale Price Index, Sub-group: Fuel and Power

Next Release Date: December 14, 2018

Wholesale Price Index-Quarterly

Wholesale Price Index-Annual

Note: Here year represent fiscal year. For example 2010 refers to the period April 2010-March 2011, and so on. 
The entire series 1970-2017 is on the same base year (2011-12=100). The data post-2012 is in the base year 2011-12. For data, before 2012, we have used yearly growth rates obtained from a series of the different base year. For example, the index of 2010 (on 2011-12 base year) has been obtained preserving its growth rate (on 2004-05 base year) and using 2011-12 index value as 100 and dividing it by the growth rate for 2010 obtained earlier.