Wholesale inflation has been rising since the start of this fiscal year amid the West Asia conflict and the Strait of Hormuz blockade, driving up oil, fertiliser and food prices. September’s reading marks the fifth data release under the revised Wholesale Price Index (WPI) series with 2022-23 as base year. Wholesale inflation contracted 0.2% in September 2025.
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“Prolonged West Asia crisis continues to drive fuel and power inflation higher and is likely to remain elevated until the resolution of the crisis,” said Devendra Pant, chief economist at India Ratings and Research (Ind-Ra). Rahul Agrawal, principal economist at ICRA, said elevated global commodity inflation expectedly pushed WPI inflation to a series-high in September.
Food inflation, which accounts for around a quarter of the WPI basket, rose to a 23-month high of 8.7% in September from 7.1% in August.
Meanwhile, retail inflation edged up to 5.54% year-on-year in September from 4.8% in August. “Elevated commodity prices are concerning as they could sustain wholesale price pressures and indirectly feed into the CPI (consumer price index) basket,” said Rajani Sinha, chief economist at CareEdge Ratings.
Also Read: GST must become an economic partnership, not just tax collection tool: CBIC chief Vivek ChaturvediInflation in manufactured products also reached a series high of 9.8% in September compared with 8.4% in August. Among manufacturing sub-groups, inflation remained elevated in basic metals (17%), chemicals (16.7%), textiles (13.9%), rubber and plastic (13.5%), and tobacco products (12.9%).
“Inflation in manufactured products firmed up, indicating a gradual pass-through of higher input costs,” said Sinha. Fuel and power inflation rose to a three-month high of 25.9% in September from 22.9% in August, reflecting a surge in global energy prices. Within the segment, inflation in crude petroleum & natural gas grew 57.3% in September compared with 34.4% in the previous month, while mineral oil inflation rose to 40% from 38.5%.
Prices of primary articles grew 8.7% year-on-year in September from 7.8% in August. The Producer Price Index (PPI) output inflation rose 11.4% year-on-year in September from 9.8% in August. The government also released a trial Input PPI for manufacturing, which increased to 106.1 in September from 104.2 in August, indicating a 1.8% rise.
Outlook
ICRA expects wholesale inflation to edge up to around 12% in October, with an unfavourable base effect adding to price pressures. Ind-Ra projects inflation to rise above 12% and remain in double digits at least till February 2027. “However, in case of a solution to the West Asia crisis, inflation could be lower,” noted Pant.ICRA expects WPI food inflation to rise to 9.5-10% in October.