India's wholesale inflation showed a marginal decline to 9.8% in July 2026, marking the third consecutive month when wholesale inflation has remained over 9% and representing a significant improvement from the previous month's 9.9%, according to official data from the Commerce and Industry Ministry. This represents a marginal decline from the 27-month high of 9.9% recorded in June, offering some relief after prices had climbed through the opening months of the financial year. The WPI for all commodities stood at 110.0 in July 2026, compared with 110.2 in June, showing continued moderation in wholesale price pressures across the Indian economy after prices had been rising since the beginning of the financial year. The latest reading was lower than the 9.95% increase economists polled by Reuters had expected, offering some relief after prices had climbed through the opening months of the financial year. The July reading was also lower than June's 9.9% reading, which was the highest recorded under India's new Wholesale Price Index (WPI) series. However, economists remain cautious about the sustainability of this decline, with Prachi Kele from PL Capital noting that wholesale inflation remains uncomfortably high at 9.8% in July, despite the marginal easing from June. According to government data, wholesale inflation recorded a slight annual decline in July, with the inflation rate decreasing by approximately 0.09 percentage points. The WPI has been on an upward trajectory since the beginning of this fiscal as the West Asia war and the resultant blockade of the Strait of Hormuz, through which the majority of crude oil is imported into India, pushed up global crude and fertiliser cost with spillover effect on food prices.
The most significant contributor to the overall inflation decline was fuel and power inflation, which fell sharply to 20.05% from the previous month's 27.41%, as reported by the Commerce and Industry Ministry. Within this sector, mineral oils inflation eased to 32.4% in July from 46.48% in June, while crude petroleum and natural gas inflation moderated to 26.99% from 34.75%. Notably, electricity inflation turned positive at 1.09% after contracting 0.76% in June, contributing to the overall improvement in fuel and power costs. The Commerce and Industry Ministry attributed the broader pressure to developments in global energy and commodity markets, with the West Asia conflict and disruption around the Strait of Hormuz pushing up global crude oil and fertiliser costs. The moderation in fuel and power costs was largely supported by softer inflation in these categories, providing significant relief to the overall wholesale price index. The category had been one of the biggest contributors to wholesale price pressures in recent months, with its inflation rate having stood at 30.33% in May before falling to 27.41% in June. However, economists warn that sustained energy and input-cost pressures could gradually feed through to consumer prices if they persist, as noted by Prachi Kele from PL Capital. According to Bank of Baroda, "Going forward, as hopes of a peace deal between US and Iran diminish and 2 key waterways remain under threat (Strait of Hormuz and Bab al-Mandeb Strait), volatility in oil prices can be expected."
For primary articles, inflation jumped to 8.52% in July, the highest in 21 months, from 7% in June, showing a broad-based hardening in prices across this category. Within primary articles, food articles inflation stood at 5.44% in July, compared with 5.49% in June, while non-food articles inflation rose sharply to 17.66% from 11.07%. The ministry identified mineral oils, food articles, manufacture of basic metals, non-food articles, manufacture of food products, and manufacture of chemicals and chemical products as the major drivers of WPI inflation in July. The WPI Food Index inflation rose to 6.65% in July from 6.14% in June, showing continued hardening in food price pressures despite the overall inflation moderation. According to Bank of Baroda, "The WPI food index, which combines primary food articles with manufactured food products, rose to a 16-month high of 6.65 per cent in July from 6.14 per cent in June." The increase in wholesale food prices is also consistent with the recent rise in retail food inflation, as consumer food inflation climbed to 5.52% in July, according to the latest CPI data. Higher prices of food items such as vegetables and other perishables have been a key source of pressure, with uneven rainfall affecting supplies in some parts of the country. According to Rahul Agrawal from ICRA Ltd, core WPI (excluding food and fuel) inflation hardened to a series high of 8.2% in July from 7.5% in June, amid an uptick in prints across 16 of the 21 sub-sectors.
In the manufactured products segment, manufactured products inflation increased to 8.29% in July from 7.48% in June, showing an uptick in inflation despite the overall moderation in wholesale prices. This divergence between lower fuel and food inflation and higher manufactured-product inflation meant that the overall decline in WPI remained limited, with the rise in manufactured-product inflation suggesting uneven price pressures across different parts of the economy. The manufacture of basic metals recorded inflation of 12.56%, compared with 12.31% in June, and chemicals and chemical products inflation stood at 13.12%, against 12.78% in the previous month. Food products inflation rose to 8.89% in July from 7.2% in June, while textiles inflation increased to 12.8% from 10.85%. Manufactured products account for the largest weight in the WPI basket at about 64.23%, while primary articles account for 22.62% and fuel and power 13.15% under the new 2022-23 WPI series. The new WPI series covers 697 commodities and is compiled by the Office of the Economic Adviser under the Department for Promotion of Industry and Internal Trade (DPIIT).
For the April-July period of the current financial year 2026-27, cumulative WPI inflation stood at 9.47%, compared with -0.2% during the corresponding period of FY 2025-26, according to the latest data from the Commerce and Industry Ministry. The ministry revised the final WPI index for May 2026 to 110.1 from the provisional estimate of 109.9, with WPI inflation for May revised to 9.88% from the provisional estimate of 9.68%. The final estimate for May was compiled with a weighted response rate of 98.14%, while the provisional estimate for July was compiled with a weighted response rate of 78.55%. Looking ahead, economists remain cautious about the trajectory of inflation, with Rahul Agrawal from ICRA Ltd anticipating a larger easing in WPI inflation to below 9.5% in August, after peaking at 9.9% each during May-June. However, he noted that prints are likely to remain elevated through much of the year, with an average WPI inflation forecast of around 8.5% for FY2027, feeding into a high nominal GDP growth figure as well. The July WPI data provides a mixed picture of price pressures, with wholesale inflation easing slightly even as retail inflation moved higher, as India's Consumer Price Index (CPI)-based retail inflation rose to 4.45% in July from 4.38% in June. The inflation numbers come against the backdrop of the Reserve Bank of India's latest monetary policy decision, with the central bank keeping the benchmark policy rate unchanged at 5.25% and projecting retail inflation at 5% for FY27, citing deficient and uneven south-west monsoon amidst El Niño conditions. According to Bank of Baroda, "The effect of El Niño was expected to strengthen over August and September, keeping pressure on food inflation and the headline number. Higher cost of insurance will add to the total freight cost, which in turn will pose upside pressures on imported commodities."
