The report warned that manufacturers are facing a rapid increase in input costs – ranging from crude oil and gas to copper, aluminium, plastics and chemicals – while the prices they charge consumers have not risen at the same pace yet.
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Crisil said its Wholesale Price Index (WPI)-based input-output ratio crossed the 1.0 mark in April 2026 for the first time in 44 months, signalling that companies are now witnessing input costs rising faster than output prices.
“The ratio stood at 1.02, driven by a 6.2 per cent on-month rise in input prices, while output prices increased a modest 0.7 per cent,” the report said.
In simple terms, the report indicates that companies are paying significantly more to manufacture products, but have so far passed on only a limited portion of those costs to consumers.
The report linked the sudden rise in costs to the ongoing West Asia crisis and the closure of the Strait of Hormuz, saying the disruption has widened the inflation shock beyond oil markets into broader industrial supply chains.
“The closure of the Strait of Hormuz has only broadened the shock to other input categories even as manufacturers are already grappling with higher costs from critical inputs such as copper and aluminium,” Crisil said in the report.
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The report highlighted that the pressure is no longer limited to fuel alone. Prices of several key industrial inputs rose sharply in April, including crude oil-linked products, metals and gas-related inputs that are widely used across sectors such as automobiles, consumer appliances, electronics, construction, packaging, pharmaceuticals and textiles.
“Based on the clustered WPI categories, copper prices surged 17.3 per cent, aluminium 20.6 per cent, crude oil-related 49.3 per cent and gas-related 19.1 per cent in April,” the report said.
The report noted that the rise in copper and aluminium prices is particularly significant because these metals form the backbone of manufacturing activity and are used extensively in electric vehicles, power infrastructure, electronics, consumer durables and renewable energy equipment.
While wholesale inflation is expected to reflect the pressure first, Crisil cautioned that the impact may gradually reach household budgets as companies begin passing on higher costs to consumers.
“With input costs expected to remain elevated this year, even after the Strait reopens, manufacturers will continue to face higher costs,” the report said.
“While WPI will be the first to reflect the inflation pressure, rising input costs are soon expected to percolate into consumer prices,” it added.
The report further said that companies may now find it easier to raise prices because consumer demand in the domestic market has remained resilient so far despite global uncertainties.
“In the domestic market, with demand holding up so far, there is room to pass on the costs to consumers and support margins,” Crisil said.
The report added that inflation based on the Consumer Price Index (CPI), especially core inflation, which excludes food and fuel, could witness upward pressure in the coming months. (ANI)