India's Wholesale Inflation Surges Past Expectations in June
India's wholesale inflation quickened to 9.87% in June, marking an increase from 9.68% recorded in May. This latest figure surpassed economists' expectations, who had largely projected a 9.15% year-on-year rise. The data, released by the commerce and industry ministry, indicates persistent price pressures across several critical sectors of the economy.
Key Drivers: Food and Industrial Goods Lead the Rise
The acceleration in wholesale prices was primarily attributed to higher costs across several key categories. These included a significant rise in food articles, mineral oils containing petroleum products, and manufactured goods such as basic metals, chemicals, and chemical products.
Accelerating Food Prices
Food inflation played a substantial role in the overall increase. The Wholesale Price Index (WPI) Food Index climbed to 6.14% in June, up from 4.49% in May, reflecting a broad-based surge in food prices. Inflation in primary articles, which encompasses food, non-food items, and minerals, accelerated sharply to 7% from 4.99% a month prior. Within this segment, food articles alone saw a 3.75% month-on-month increase.
Fuel and Power See Some Moderation
In contrast to other sectors, inflation in the fuel and power group eased to 27.41% in June from 30.33% in May. This moderation was primarily driven by lower prices of mineral oils, while electricity prices remained stable during the month.
Manufacturing Sector Holds Steady, with Specific Gains
The manufactured products category, which accounts for nearly two-thirds of the WPI basket, saw its inflation rate remain unchanged at 7.48%. However, within this broad category, 22 out of 24 manufacturing groups experienced monthly price increases. Notable gains were observed in the manufacture of basic metals, chemicals and chemical products, food products, machinery and equipment, and other manufacturing sectors.
Understanding the Revised WPI Series
The June inflation data is presented under a revised Wholesale Price Index series, which adopted 2022-23 as its new base year. Introduced by the government last month, this updated series aims to provide a more accurate reflection of the current economic structure. It expands the commodity basket significantly, now covering 957 items compared to 697 under the previous 2011-12 base year. The revised basket also incorporates newer products and sectors, including renewable energy sources like solar and wind electricity, alongside nuclear electricity.
Furthermore, the government also revised the final WPI inflation estimate for April 2026 to 8.36%, slightly up from the provisional estimate of 8.26%, based on a more comprehensive response rate.