India’s Wholesale Price Index (WPI) inflation climbed to an 11-month high in February, rising to 2.13% year-on-year, compared with 1.8% in January. On a sequential basis, however, price pressures eased slightly, with WPI increasing 0.25% month-on-month, lower than the 0.4% rise recorded in January. The moderation was largely due to softer trends in manufactured products and primary articles.
Within the primary articles category, prices declined 0.5% on a monthly basis. However, the movement within sub-categories was mixed. Non-food items rose 0.8%, while crude oil prices increased 4.2% during the month. In contrast, food prices fell 1.3%, and mineral prices declined 1.2%. Despite the sequential moderation, primary articles registered a sharp annual increase of 3.3%, compared with 2.2% in the previous month. Meanwhile, core WPI inflation, which excludes food and fuel, edged up slightly by 10 basis points to 3.3% year-on-year in February.
Food inflation also showed an upward trajectory on an annual basis, rising to 1.85% year-on-year in February, compared with 1.41% in January. On a monthly basis, however, food inflation moderated by 0.67%. Within the food basket, pulses prices rose 1.97% month-on-month, driven mainly by a sharp 22.9% increase in Chawali prices, after a steep fall in the previous month. Urad prices also moved up 2.71%. Fruit prices surged 8.54%, while spices rose 3.77%. On the other hand, vegetable prices declined sharply, with potatoes, onions and tomatoes registering significant price drops. Cereal prices also slipped slightly, while milk prices saw a marginal increase of 0.21%.
In the fuel and power segment, inflation rose 1.17% month-on-month, though it remained 3.78% lower on a yearly basis. The monthly increase was largely driven by higher prices of LPG, mineral oil, diesel and petrol. At the same time, crude oil and natural gas prices showed mild moderation, while electricity prices declined slightly.
Looking ahead, WPI inflation is expected to edge higher in the coming months. Factors such as rupee depreciation, rising crude oil prices and geopolitical tensions in West Asia could exert upward pressure on wholesale prices. According to estimates, WPI inflation for March could reach around 2.8–2.9%, with the average for FY27 projected at 2.9–3.1%. However, if crude oil prices remain elevated in the USD 75–85 per barrel range, the headline WPI could rise by an additional 100–120 basis points.
