India WPI Inflation Eases Marginally, But Food Inflation Rises
In a welcome respite for the Indian economy, the wholesale price inflation (WPI) moderated marginally to 9.78% in July 2026, according to provisional data released by the Ministry of Commerce and Industry. This slight easing comes on the back of a 9.87% inflation rate in June. The Wholesale Price Index for all commodities stood at 110.0 in July, against 110.2 in June, indicating a subtle decrease in prices.
Food Inflation Hardens, Fuel Pressures Moderate
The WPI Food Index, which combines food articles under primary articles with manufactured food products, rose to 6.65% in July from 6.14% in June. This increase in food inflation is a concern for policymakers, who will need to address this trend to prevent further price hikes. On the other hand, fuel and power inflation eased sharply to 20.05% from 27.41%, a significant drop that could bring relief to consumers.
Key Contributors to July’s WPI Inflation
The Ministry of Commerce and Industry identified mineral oils, food articles, basic metals, non-food articles, food products, and chemicals as the key contributors to July’s WPI inflation. These sectors have been consistently driving inflation in recent months, and addressing their price pressures will be crucial for the overall economy.
Sector-Wise Breakdown
- Primary Articles: Inflation in primary articles increased to 8.52% from 7% in June, driven primarily by food articles inflation, which remained broadly stable at 5.44%.
- Manufactured Products: Manufactured products inflation rose to 8.29% from 7.48%, with manufactured food products inflation increasing to 8.89% and textile inflation rising to 12.8%.
- Fuel and Power: Fuel and power inflation eased sharply to 20.05% from 27.41%, with mineral oils inflation declining to 32.4% and crude petroleum and natural gas inflation moderating to 26.99%.
- Non-Food Articles: Non-food articles inflation climbed to 17.66% from 11.07%, driven primarily by minerals inflation, which increased to 13.28%.
Revised May WPI Inflation
The Ministry of Commerce and Industry revised May’s final WPI inflation to 9.88% from the earlier provisional estimate of 9.68%. The final May index was revised to 110.1 from 109.9, indicating a slight increase in prices.
Methodology
The provisional July estimate was based on a weighted response rate of 78.55%, compared with 98.14% for the final May estimate. This slight decrease in response rate could impact the accuracy of the July estimate, and policymakers will need to consider this when making decisions based on the data.
In conclusion, while the WPI inflation rate eased marginally in July, the rise in food inflation is a cause for concern. Policymakers will need to address this trend to prevent further price hikes and ensure that the economy remains on a stable trajectory.