New Delhi: India’s wholesale inflation rose sharply to 8.3 per cent year-on-year in April, government data showed on Thursday. The number was much higher
than March’s 3.88 per cent and also beat the 4.4 per cent estimate in a Reuters poll.
The spike was mainly driven by fuel and crude oil prices, which pushed up costs for producers across the economy. For a normal household, WPI may sound like a distant number. But it can slowly show up in transport bills, factory costs, construction material and, after some time, even shop prices.
What is wholesale inflation?
Wholesale inflation tracks price changes at the producer and wholesale level. It shows how much businesses are paying for raw materials, fuel and goods before they reach consumers.
In April, the Wholesale Price Index, or WPI, hit its fastest pace in the current series. The reading was also the highest since October 2022, when wholesale inflation stood at 8.67 per cent.
Why did WPI inflation rise so sharply?
The biggest push came from the fuel and power category. It jumped to 24.71 per cent in April from 1.05 per cent in March.
Some key numbers explain the pressure:
- Crude petroleum and natural gas inflation rose 67.18 per cent.
- Petrol prices rose 32.4 per cent.
- Diesel prices increased 25.19 per cent.
- Food inflation moved up to 2.31 per cent from 1.85 per cent.
This fuel shock is linked to high global crude oil prices, geopolitical tensions and supply worries. India imports nearly 90 per cent of its crude oil and around 60 per cent of its LPG requirement, which makes the economy sensitive to global energy price swings.
How fuel costs are spreading into other sectors
The rise was not limited to fuel. Manufacturing costs also moved higher. Manufactured product inflation rose to 4.62 per cent in April from 3.39 per cent in March.
Basic metals inflation climbed to 7 per cent, while chemicals and chemical products rose 5.09 per cent. These are not small items. They feed into construction, engineering, capital goods and daily industrial work.
There was some relief in food. Vegetable prices rose only 0.53 per cent year-on-year in April, lower than the 1.45 per cent rise in March.
