India’s Wholesale Inflation Surges to 9.68% in May as Fuel and Manufacturing Costs Rise

The latest data released by the Ministry of Commerce and Industry also marks the first major revision of India’s wholesale inflation series in more than a decade. The base year for the index has been updated from 2012 to 2023, reflecting changes in the structure of the economy and production patterns.

According to the ministry, the rise in wholesale inflation during May was primarily driven by higher prices of mineral oils, crude petroleum and natural gas, chemicals and chemical products, and basic metals. The surge highlights the continuing impact of elevated global crude oil prices amid persistent geopolitical tensions across West Asia.

The sharp increase in energy costs was evident in the fuel and power category, where annual inflation soared to 30.33 per cent in May, compared with 24.89 per cent in April. Inflation in primary articles also registered a notable rise, climbing to 5 per cent from 3.78 per cent during the same period.

Manufactured products, which carry the largest weight in the WPI basket, recorded an inflation rate of 7.48 per cent in May, up from 6.68 per cent in April. The increase indicates that rising input costs are continuing to pass through the manufacturing sector, adding pressure to wholesale prices.

Food-related inflation also witnessed an uptick. The WPI Food Index, which includes food articles and food products, increased to 4.49 per cent in May from 3.11 per cent in April, reflecting broader price pressures across essential commodities.

The sharp rise in wholesale inflation underscores growing concerns over imported inflation risks as elevated global energy prices continue to affect domestic supply chains. With fuel, manufacturing, and food costs all moving higher, the latest data signals sustained inflationary pressures across the economy despite the introduction of the revised WPI framework.