Wholesale price inflation (WPI) in India is likely to exceed 10 percent in September, and this situation is expected to continue in the short term. Economists point to various factors including adverse base effects, rising global commodity prices, and persistent pressures from food, fuel, and construction materials.
Upward Trend in Wholesale Price Inflation
According to reports, wholesale price inflation in India reached 9.92 percent in August 2026, up from 9.78 percent in July and 9.97 percent in June. This increase is primarily due to a sharp rise in fuel and energy inflation, which rose from 20.05 percent to 22.93 percent. Additionally, inflation in manufactured products increased from 8.29 percent to 8.37 percent.
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Donder Pant, chief economist at the Indian Rating and Research Institute, has predicted that wholesale inflation will reach 10.2 percent in September and remain at high levels until the end of the year unless a permanent solution is found for the long-term crises in West Asia.
Impact of Regional Crises and Global Commodity Prices
Pant also noted that the rainfall deficit until August had little impact on food prices, and the increase in food inflation was more due to adverse base effects. However, he emphasized that the crises in West Asia have reversed two months of declining fuel and energy inflation and are expected to keep prices at high levels.
Economists have also reported signs of broader price pressures in the manufacturing sector. In August, seven sectors including tobacco products, textiles, chemicals, rubber and plastics, base metals, electrical equipment, and other manufacturing saw double-digit inflation. These sectors account for a total of 26.3 percent of WPI, indicating that inflationary pressures may be moving towards structuralization.
Rahul Agrawal, chief economist at ICRA, announced that wholesale price inflation in August reached 9.9 percent, up from 9.8 percent in July. This increase was entirely influenced by food and fuel prices, while other groups experienced less volatility.
Food inflation also reached its highest level in 20 months at 7.1 percent in August, up from 6.6 percent in July, with this increase mainly driven by prices of fruits and vegetables, milk, spices, and sugar.
Agrawal predicts that food inflation will rise further in September and October due to adverse base effects and rising prices in certain food items. Global commodity prices, fuel inflation, and core WPI inflation are also expected to remain high.
Overall, wholesale price inflation is expected to exceed 9.5 to 10 percent in September and October, and then decline if global energy and commodity prices do not rise further.
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