New Delhi: India’s wholesale price inflation accelerated to 1.81% in January 2026 on a year-on-year basis, reversing the near-flat trend seen in late 2025, as higher prices of manufactured goods offset continued softness in fuel and select food items, according to data released by the Ministry of Commerce & Industry.
On a month-on-month basis, the Wholesale Price Index (WPI) rose 0.51% in January, maintaining the same pace as December, reflecting steady cost pressures at the producer level.
Manufacturing Leads the Uptick
The primary driver of January’s inflation print was the Manufactured Products segment, which carries a weight of 64.23% in the WPI basket. Inflation in this category rose to 2.86% year-on-year in January from 1.82% in December.
Within manufacturing, prices of basic metals recorded a sharp rebound, with the index for manufacture of basic metals rising significantly month-on-month. Textiles, food products and electrical equipment also saw price gains.
Economists say the broad-based rise across 19 of the 22 manufacturing groups signals improving industrial demand, though it may also reflect pass-through of input cost pressures.
Fuel & Power Remain a Drag
In contrast, the Fuel & Power category contracted 4.01% year-on-year in January, deepening its deflationary trend. On a monthly basis, the index declined 1.62%, primarily due to lower electricity and mineral oil prices.
Petrol and high-speed diesel continued to register negative annual inflation, offering some relief to logistics and transportation costs.
Mixed Signals from Food Basket
The WPI Food Index rose 1.41% year-on-year in January, marking an uptick from the previous month . However, month-on-month food prices declined, with vegetables registering a sharp sequential correction.
Vegetable prices fell significantly compared to December, while potato and onion prices showed volatile movements. Meanwhile, milk and protein items such as eggs, meat and fish recorded moderate increases.
Primary Articles overall rose 2.21% year-on-year but declined marginally on a monthly basis, reflecting divergent trends between food and non-food articles.
Trend Reversal from Late 2025
The January print marks a clear turnaround from the deflationary phase seen in October and November 2025, when WPI inflation had dipped into negative territory. The All Commodities index stood at 157.8 in January, compared to 156.2 in November.
Data also showed that the WPI for January was compiled at a weighted response rate of 84.2%, and remains provisional pending revisions.
Policy Implications
While retail inflation remains the primary gauge for monetary policy, the firming of wholesale prices — especially in manufacturing — may signal emerging pipeline pressures. However, sustained deflation in fuel and moderation in food prices could temper broader inflationary risks.
With global commodity markets showing mixed trends and domestic industrial activity gaining traction, economists expect WPI inflation to remain range-bound in the near term unless energy prices witness a sharp reversal.
The next WPI data for February 2026 is scheduled for release on March 16, 2026