India’s wholesale price inflation rose to an 11-month high of 2.13% (year-on-year) in February (provisional), up from 1.81% in January, primarily due to increases in food prices along with prices in the manufacture of basic metals and other manufacturing, according to data released by the Ministry of Commerce and Industry on Monday.
However, the February inflation does not reflect the potential impact of the West Asia conflict, which pushed oil prices higher. That effect is expected to appear in the March print, as economists anticipate a significant rise in wholesale inflation. Fuel and power inflatiion remained in negative territory in February at -3.78%, though this improved from -4.01% in January. Devendra Pant, Chief Economist at India Ratings, expects wholesale inflation to jump to 3.7% in March.
WPI-based inflation
The Wholesale Price Index (WPI)-based inflation has been on an upward trend for the last four months. It increased from -1.02% in October to -0.13% in November, turned positive at 0.96% in December, and accelerated further to 1.81% in January. For context, WPI inflation was 2.45% in February 2025.
On the primary articles side (weight 22.62%), inflation rose to 3.27%. Food articles inflation accelerated further to 2.19% in February after returning to positive territory in January following nine consecutive months of deflation. This was driven mainly by fruits, vegetables, and the meat and eggs segments.
Vegetable inflation declined to 4.73% (Y-o-Y) from 6.78% in January, while fruit inflation stood at 3.57% in February. Economists noted that food inflation firmed up as the favourable base effect waned.
WPI Food Index
The WPI Food Index (weight 24.38%), comprising food articles from the primary group and food products from manufactured products, saw its inflation rate rise to 1.85% in February.
Non-food articles inflation accelerated further to 8.80% in February, after a sharp spike to 7.58% in January from 2.95% in December.
Manufactured products (weight 64.23%) recorded a 2.92% inflation rate, up from 2.86% in January. The manufactured products index rose by 0.47% (month-on-month) to 148.2 (provisional) in February from 147.5 in January. Basic metals inflation was 4.35% in February, down from 5.98% (Y-o-Y) in January, while textiles inflation rose further to 3.29% from 2.48% in December.
Retail inflation, measured by the Consumer Price Index (CPI), rose to 3.21% in February—the second print under the revised CPI series with base year 2024—according to data released by the National Statistics Office on Thursday. This uptick was driven by higher food prices and precious metals such as gold and silver jewellery.
Rajani Sinha, Chief Economist at CareEdge Ratings, said the overall rise in WPI inflation was partly offset by continued deflation in the fuel and power category. She added that elevated energy prices are likely to exert upward pressure on WPI inflation as input costs rise. “The impact of elevated energy prices is expected to be more pronounced on WPI compared with CPI, given the higher weight of petroleum, natural gas, and mineral oil in the WPI basket (10.4%) relative to the CPI basket (4.8%),” Sinha said.
Madan Sabnavis, Chief Economist at Bank of Baroda, said the WPI inflation number may not matter directly for policy formulation but would reflect the impact of crude at $100/barrel in a more effective manner than the CPI. “The impact on manufactured products would be important as this will be the basis for transmission of higher cost to products which enter the CPI,” he said.