West Asia war keeps wholesale prices on the boil
In Short
WPI at series-high of 11.39%; analysts expect double-digit inflation through Q3
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West Asia war keeps wholesale prices on the boil
New Delhi: India's Wholesale Price Index-based inflation rose sharply to series-high of 11.39 per cent in September, compared to 9.92 per cent in August, on rising prices of food, manufactured items, and fuel and power, government data showed on Wednesday. Inflation in the food index rose to 8.66 per cent in September from 7.05 per cent in August. In manufactured items, WPI inflation was at a series high of 9.76 per cent, higher than 8.37 per cent in August. In the fuel and power basket, Wholesale Price Index (WPI)-based inflation was 25.85 per cent in September, compared to 22.93 per cent in the previous month. "With international energy and metal prices elevated, wholesale and producer price inflation may accelerate in coming months," Barclays said in a research note.
The WPI has been on an upward trajectory since the beginning of this fiscal year 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 costs with a spillover effect on food and commodity prices. ICRA, Principal Economist, Rahul Agrawal, said elevated global commodity inflation pushed up the WPI inflation to a series-high. WPI-food inflation rose to a 23-month high in September 2026 amid a significant hardening in prints across the cereals, pulses, fruits and vegetables segments. Amid hardening food inflation and no respite so far on global energy and commodity prices, ICRA expects the WPI inflation to inch up further to 12 per cent in October 2026, with the adverse base also playing spoilsport. WPI inflation prints are expected to remain elevated, in double digits, through third quarter of FY2027, Agrawal said.
Also output producers price index (OPPI) inflation rose 11.4 per cent y/y in September from 9.8 per cent in August. The rise in output PPI inflation continues to be driven by higher manufacturing and mining PPI inflation, Barclays said.
"As global energy prices remain elevated amid the Middle East conflict, along with the flare up in domestic food prices, we expect WPI inflation to rise further in coming months," it added.
