Wholesale Inflation Climbs to 1.81% in January as Manufacturing Costs Rise

India’s wholesale price inflation, measured by the Wholesale Price Index (WPI), rose to 1.81% in January, accelerating sharply from 0.83% in December, provisional data released by the Ministry of Commerce and Industry showed. The latest reading marks the strongest wholesale inflation print in several months, signalling a return of producer-level price pressures.

For context, WPI inflation had remained below 1% for most of the previous quarter, with intermittent deflationary prints earlier in the financial year.

Manufactured Products Account For Bulk Of The Rise

The manufactured products category, which carries the largest weight of about 64% in the WPI basket, recorded a year-on-year increase of around 1.6–1.7% in January, up from roughly 1.0% in December. This segment alone contributed to the majority of the rise in headline WPI.

Within manufacturing, price gains were seen across multiple sub-groups:

• Basic metals continued to firm amid higher global metal prices
• Food products and textiles saw moderate increases
• Chemicals, machinery, and electrical equipment also reported positive price movement

More than two-thirds of manufacturing sub-groups registered inflation on a year-on-year basis, indicating broad-based cost pressures rather than isolated spikes.

Primary Articles Turn Supportive 

Prices of primary articles, which include food articles, minerals, and crude materials, rose by over 3% year-on-year in January, compared with a milder increase in the previous month. Food articles within this category showed gradual firming, reflecting higher prices of select agricultural commodities.

However, non-food articles helped prevent sharper inflation, keeping overall primary inflation contained.

Fuel And Power Still Offset Inflation Pressures

The fuel and power segment remained in deflation, contracting by around 0.5–1% year-on-year. Lower prices of coal, electricity, and petroleum-linked products continued to act as a drag on headline WPI, offsetting some of the inflationary impulse from manufacturing and primary goods.

On a month-on-month basis, the overall WPI rose by approximately 0.5% in January, suggesting that price momentum strengthened sequentially as well.

While monetary policy is guided primarily by retail inflation, wholesale inflation serves as a leading indicator of input costs faced by producers. Persistent firmness in WPI can eventually feed into consumer prices and corporate margins, influencing earnings expectations across manufacturing, infrastructure, and capital-goods sectors.

The Reserve Bank of India monitors wholesale price trends as part of its broader assessment of inflation dynamics and cost-push pressures in the economy.

Also read: Compliance or Complexity? How Draft Tax Rules Could Burden MSMEs, Broker