India’s wholesale inflation gathered pace in January, climbing to a 10-month high of 1.81 per cent, according to data released by the Ministry of Commerce and Industry on Monday.
The latest reading marks a sharp rise from 0.83 per cent recorded in December 2025, signalling renewed price pressures at the wholesale level. While the number itself may appear modest, the movement is significant.
Wholesale Price Index (WPI) trends often act as an early signal of cost pressures building within the economy, pressures that can eventually filter down to retail consumers.
What Lifted Wholesale Prices in January?
The January uptick was largely driven by higher prices in manufactured goods and certain primary commodities, reported Business Standard. According to official data, the positive rate of inflation was attributed to an increase in prices of basic metals, other manufacturing items, non-food articles, food articles and textiles.
Manufactured goods, a critical component of WPI, recorded a 1.30 per cent rise in January. Out of 22 manufacturing groups, 19 reported price increases while only three saw declines. Price gains were noted in basic metals, food products, textiles, electrical equipment and other manufacturing segments. In contrast, pharmaceuticals, machinery and equipment, and furniture witnessed price declines compared to December.
The strength in basic metals and textiles suggests firm demand conditions, while broader gains across manufacturing categories indicate cost pressures that may not be isolated.
Interestingly, prices of primary articles, which include farm produce, minerals and crude oil, fell slightly by 0.15 per cent in January.
Food article prices within this group declined 1.79 per cent, and mineral prices slipped 0.47 per cent. However, non-food articles became significantly more expensive, rising 5.32 per cent, while crude petroleum and natural gas prices climbed 4.27 per cent compared to December.
This divergence highlights how headline inflation can mask contrasting movements within subcategories. While certain agricultural items became cheaper, energy-linked inputs and industrial raw materials exerted upward pressure.
Food Inflation Edges Higher
The WPI food index showed that food inflation rose to 1.41 per cent in January from 0 per cent in December 2025.
Although primary food articles declined on a month-on-month basis within the broader category, the aggregate movement across components resulted in a modest uptick in the food index.
For policymakers, food inflation remains a sensitive metric, as it has both social and political implications.
Fuel and Power Offer Some Relief
Fuel and power prices offered partial relief during the month, falling 1.62 per cent in January.
Electricity prices dropped 2.91 per cent, and mineral oil prices fell 1.68 per cent. Coal prices, however, inched up by 0.73 per cent.
The decline in energy costs may have helped cushion the broader rise in wholesale prices. Still, with crude petroleum and natural gas prices increasing within primary articles, the outlook remains closely tied to global energy trends.
While wholesale inflation rose, retail inflation remained relatively moderate.
India’s Consumer Price Index (CPI) inflation stood at 2.75 per cent in January 2026, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Thursday.
Notably, January’s CPI data marks a shift in the base year to 2024. The revision updates the index to reflect evolving spending patterns over the past twelve years. Under the new structure, services now carry a higher weight, while food’s share has been reduced.
The base year revision is important because it recalibrates how inflation is measured, ensuring that the basket of goods and services more accurately represents contemporary consumption behaviour.
Why the Gap Between WPI and CPI Matters
Wholesale and retail inflation often move differently in the short term. WPI reflects producer-level price movements, while CPI measures the cost borne by consumers.
A sustained rise in wholesale prices can eventually feed into retail inflation, especially if manufacturers pass on higher input costs. However, if demand remains moderate or competitive pressures persist, companies may absorb part of the cost increase.
For now, CPI inflation at 2.75 per cent suggests that retail price pressures remain contained even as wholesale inflation ticks higher.
What This Means for the Economy
The January data paints a nuanced picture. On one hand, rising WPI inflation at 1.81 per cent, the highest in 10 months, indicates strengthening price momentum in manufacturing and certain raw materials. On the other, retail inflation remains within manageable levels.
The interplay between these two measures will be closely watched in the coming months, particularly as policymakers assess growth and inflation dynamics.
For businesses, the data signals a potential build-up in input costs. For consumers, the immediate impact appears limited, but trends at the wholesale level could shape price movements ahead.
