Official data published Monday showed the reading for May was higher than April’s 8.3%. In the same month last year, the gauge had contracted 0.2%.
The revamped WPI series expands coverage to 957 items from 697 under the previous 2011-12 base-year series.
The updated basket includes new energy sources such as solar and wind under the electricity group, and nuclear electricity has also been included in the basket.
Crude Petroleum and Natural Gas have been reclassified to the fuel and power category from primary articles, aligning them more closely with coal, electricity, and petroleum products. “The recent cooling in global energy and commodity prices after the easing of tensions in the West Asia is expected to provide respite to the WPI inflation print for June,” Rahul Agrawal, principal economist at ICRA, said.
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Megha Arora, director at India Ratings and Research (Ind-Ra), expects wholesale inflation to ease marginally to 9.3% in June, supported by lower global crude oil prices amid signs of de-escalation in the West Asia conflict.Bank of Baroda projects wholesale inflation to remain in the 8-9% range in the coming months, provided crude oil prices remain stable.
Retail inflation, meanwhile, rose to 3.93% year-on-year in May from 3.5% in April.
Fuel and power remained the primary driver of wholesale inflation, with prices in the category rising 30.3% in May compared with 24.9% in April. Within this, inflation in mineral oils surged to 49.8% from 40.7%, while crude petroleum and natural gas inflation increased to 61.5% from 56.3%.
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The surge reflects the impact of elevated global energy prices.
Rajani Sinha, chief economist at CareEdge Ratings, noted that global energy prices have cooled considerably following recent developments in West Asia, although the situation remains fluid.
She also cautioned that the increasing likelihood of an El Nino event this year poses upside risks to food inflation.
Food, which accounts for around a quarter of the basket, rose 4.5% in May from 3.1% in April.
Inflation in manufactured products rose to 7.5% in May from 6.7% in April, while inflation in primary articles increased to 5% from 3.8%.
Key manufacturing sub-groups registered high inflation, including basic metals (12.3%), chemicals (13.4%), and textiles (10.2%). “High global metal prices, and overall higher cost of imported inputs are likely to keep inflation in this segment high in the coming months,” said Arora.
The revised index has also altered category weightings. The share of fuel and power increased to 14.1% from 13.2%, while the weight of manufactured products declined to 63.1% from 64.2%. The weight of primary articles edged up to 22.8% from 22.6%.
Annually, WPI increased 0.4% in FY26 from the year before. CareEdge Ratings projects average WPI inflation of around 7.8% in FY27, assuming Brent crude oil prices average about $90/bbl.
PPI, Services Index
Alongside the revised WPI, the government also released the Producers Price Index (PPI) for the first time. PPI inflation rose to 9.4% in May from 8.1% in April.
“Considering the wide usage of WPI in price escalation clauses, this index will be released for five years from the date of its release, along with PPI, and will be discontinued thereafter,” the commerce ministry said in a statement.
The ministry also introduced the Service Producer Price Index, covering seven sectors including banking, securities transactions, insurance, railways and telecom.
The Securities Transaction Service Price Index increased 2.8% in the fourth quarter of FY26 compared with the previous quarter, while railway passenger services rose 2.2% and insurance services marginally by 0.8%. In contrast, banking service prices declined 1.3%, pension fund management services fell 2.4%, and air passenger service prices slipped 0.4%. Telecom services and railway freight services remained unchanged during the quarter.
“Most heads of services PPI remained benign in Q4FY26, reflecting the fact that the current surge in inflationary pressures is supply driven and not demand driven,” Sinha said.
The government also released a trial Input PPI for manufacturing. The index stood at 104.9 in May, unchanged from April.