Wholesale Price Index (WPI) of India

WPI inflation accelerated to an eight-month high of 3.93% in November.

Published monthly by Ministry of Commerce and Industry. Updated until the month of November 2017. (Published on December 14th, 2017) 
Note: WPI Food Index consists of ‘Food Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products. 

Recent Data Trend

In November 2017, the wholesale price index rose to a eight-month high of 3.93% YoY, from 3.59% YoY in the previous month. The rise is marginally below the Reuters poll forecast of 3.78% YoY. The food inflation, based on WPI Food Index, also accelerated to a three-month high of 4.11% from 3.24% in October. The firming up of wholesale price inflation is in consonance with the retail inflation which soared to a 15-month high of 4.88% YoY in November.

The quickening of inflation was driven by a sharp uptick in food articles and LPG prices which rose by 6.06% and 31.3% respectively, on a YoY basis. The inflation in food articles, a major component of primary articles, was on account of increase in the prices of vegetables (59.8% YoY) and a surge in onion prices (178.2% YoY) from already-elevated levels in October (127% YoY) due to a drop in sowing during Kharif season. However, pulses contracted to an all-time low of 35.48% YoY, owing to excess stockholding by the government.

Even the core inflation measure, (which excludes food and fuel from the headline WPI index), recorded a growth of 3% YoY, highest since July 2014.

Inflation in the manufactured products, on the other hand, eased marginally to 2.61% YoY from 2.62% YoY in October due to a decline in the inflation in food products (0.5% YoY) and paper products (2.9% YoY).

Judging from the trajectory since the beginning of 2017, while, CPI inflation hit a low of 1.4% YoY in June 2017, however, inflation has maintained an upward trajectory since then. With the CPI inflation edging up to 4.88% YoY (exceeds MPC's inflation target of 4%) in junction with the RBI raising its inflation projections (4.3-4.7% for the second half of FY 2017-18), it is quite likely that the policy rates will be put on hold for this fiscal year.

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 major components of WPI include Manufactured Products, Primary Articles, Fuel, and Power in the decreasing order of weight-age to the stated components. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing, and construction. This 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 published regularly. 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: January 15th, 2018