India has updated its wholesale inflation framework by shifting the Wholesale Price Index (WPI) base year from 2011-12 to 2022-23 and introducing a phased move towards Producer Price Indices (PPI), which will be released alongside WPI for five years before WPI is discontinued.
The revised framework has been released by the Office of Economic Adviser under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
It includes the new WPI series, Output Producer Price Index (OPPI), trial Input Producer Price Index (IPPI) and Service Producer Price Index for seven services, all with 2022-23 as the base year.
Why The WPI Revision And PPI Transition Matter
The WPI revision updates the inflation basket to better reflect the present structure of the economy, while the transition to PPI marks a broader shift in how India measures price changes at the producer level.
This matters because WPI is widely used to track wholesale inflation and is also built into price escalation clauses in contracts.
By continuing WPI for five years along with PPI, the government is giving businesses, analysts and other users time to adjust before the older system is phased out.
The move also brings India closer to global statistical practices, as PPI gives a clearer view of prices received by producers for their output and prices paid by industries for inputs.
This helps explain how cost pressures move through the production chain before they show up more widely in the economy.
What Is PPI?
Producer Price Index measures price changes from the producer’s side, rather than from the consumer or wholesale market side.
Output PPI tracks the prices producers receive for goods and services, while Input PPI tracks the prices industries pay for raw materials and other inputs.
Together, the two indices help show whether rising input costs are being absorbed by producers or passed on through higher output prices.
What Has Changed In The WPI Basket?
The new WPI basket has become wider and more updated, with the number of items increasing from 697 in the 2011-12 series to 957 in the 2022-23 series.
The basket now includes solar, wind and nuclear electricity under the electricity group, while crude petroleum and natural gas have been shifted from Primary Articles to Fuel and Power.
The shift is meant to create a more coherent structure for tracking energy prices, as Fuel and Power already includes coal, electricity and petroleum products.
How Has The Methodology Been Improved?
The revised WPI series uses Gross Value of Output to assign weights, replacing the earlier net traded value method, so that the weight of each commodity reflects domestic production more directly rather than trade flows.
The computation method has also been updated, with elementary indices now compiled through a short-term formulation method instead of the earlier long-term formulation method.
For missing price data, the new series uses targeted mean imputation instead of simply carrying forward the previous price.
What Does The May 2026 WPI Data Show?
Under the new 2022-23 base year, India’s WPI inflation stood at 9.68% in May 2026, rising from 8.26% in April.
The all-commodities WPI index also increased to 109.9 in May from 108.8 in the previous month.
Fuel and Power remained the sharpest source of price pressure, with inflation rising to 30.33% in May from 24.89% in April.
Primary Articles inflation increased to 4.99% from 3.78%, while Manufactured Products inflation rose to 7.48% from 6.68%.
Which Items Drove Wholesale Inflation?
The main drivers of WPI inflation in April and May 2026 were mineral oils, crude petroleum and natural gas, chemicals and chemical products, and basic metals.
Food inflation also moved higher during the month.
The WPI Food Index, which combines Food Articles from Primary Articles and Manufactured Food Products from Manufactured Products, recorded inflation of 4.49% in May compared with 3.11% in April.
What Does The Output PPI Show?
The Output PPI for all commodities stood at 109.6 in May 2026, compared with 108.6 in April, indicating a rise in producer-level output prices during the month.
Among major groups, the May indices stood at 111.9 for Agriculture, Forestry and Fishing, 122.3 for Mining and Quarrying, 109.5 for Manufactured Products and 90.2 for Electricity.
Read also : India’s total exports rise 15.83% to $81.96 billion in May as merchandise and services shipments grow
What Does The Trial Input PPI Show?
The trial Input PPI, currently being published on an experimental basis for the manufacturing sector, stood at 104.9 in May 2026.
This index is important because it tracks the prices industries pay for inputs purchased from the market.
Over time, it can help show whether rising input costs are putting pressure on manufacturers and whether those costs are likely to move into output prices.
Which Services Are Covered Under Service PPI?
The government has started compiling Service Producer Price Indices in a phased manner, with the first phase covering banking, securities transaction, insurance, management of pension funds, railways, air passenger services and telecom.
For Q4 of FY 2025-26, the Securities Transaction Service Price Index stood at 91.7, Banking Service Price Index at 100.9, Management of Pension Funds Service Price Index at 103.8, Insurance Service Price Index at 102.8, Telecom Service Price Index at 112.2, Railway Service Price Index at 103.3 and Air Passenger Service Price Index at 106.9.
When Will The Data Be Released?
WPI, Output PPI and trial Input PPI will be released every month on the 14th of the following month, or on the next working day if the 14th is a holiday.
Service PPIs will be released quarterly with a lag of 55 days from the close of the reference quarter.
Why Old And New WPI Data Need Careful Comparison
The government has provided broad linking factors to help users compare the old 2011-12 WPI series with the new 2022-23 series, but it has also advised caution because the item basket and methodology have changed significantly.
The linking factor is 1.53 for all commodities, 1.71 for Primary Articles, 1.65 for Fuel and Power and 1.44 for Manufactured Products.
Since the composition of the basket has changed at lower levels, the government has not prescribed a single method for converting old indices into the new series.
What Is The Bigger Picture?
The new WPI series is more than a routine base-year update. It expands the inflation basket, updates energy coverage, improves methodology and starts India’s gradual move towards PPI as the main measure of producer-side price movement.
For businesses, analysts and policymakers, this means a more detailed view of inflation across both inputs and outputs, and a clearer understanding of how price pressures travel through the economy.
