Economists expect the Wholesale Price Index (WPI)-based inflation to rise further as tensions in the region persist. In March last year, the reading stood at 2.3%. “Looking ahead, the adverse impact of the surge in global energy prices, along with elevated shipping, freight and input prices, is expected to continue to weigh on the landed cost of imports, thereby exerting upward pressure on the WPI print for April,” said Rahul Agrawal, senior economist at ICRA. ICRA expects WPI inflation to increase to about 4.8% in April, while India Ratings and Research estimates 4.7%.
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Supply disruptions during March raised input costs across items, including sulphuric acid (77.2%), brass metal/sheet/coils (22.9%), copper wire (21.9%), aluminium powder (15.8%) and aluminium alloys (13.5%).
Inflation in the fuel and power segment turned positive at 1.1% in March, compared with a contraction of 3.8% in February. Crude oil prices surged 51.6%, reversing a 1.3% decline the month before.
Fuel, power inflation turns positive at 1.1% in March; economists see further rise
Agrawal highlighted that crude petroleum and natural gas, and the fuel and power groups together accounted for 150 basis points of the 175 bps uptick in the headline print in March relative to February. A basis point is a hundredth of a percentage point. Refineries increased diesel prices by more than 25% in March during the West Asia crisis. At the same time, domestic gas cylinder prices increased ₹60, while commercial cylinders went up by a total of ₹310. On average, WPI inflation stood at 0.7% in 2025-26, lower than 2.3% in the preceding financial year. Core WPI (non-food manufactured items) inflation rose to a 41-month high of 3.7% in March from 3.3% in February.
Manufacturing, food
Manufactured products, which account for 64.23% of the WPI basket, saw inflation increase to 3.4% in March from 2.9% in February. Out of 22 manufactured sub-groups, 16 recorded price gains, including basic metals (4%), textiles (4.9%), food products (1.8%) and chemical products (2.2%).
Inflation in primary articles rose to 6.4% in March from 3.3% in February. Food, which accounts for around a quarter of the WPI basket, increased 1.85% during the month. Within major food categories, prices of cereals, pulses and wheat declined 2.5%, 5.2% and 4.6%, respectively. However, vegetable prices increased 1.5%, even as key items such as potato and onion saw sharp declines of 27.9% and 42.1%, respectively.
Also Read: Food, fuel prices push up March retail inflation to 3.4%
Meanwhile, retail inflation also edged up to 3.4% in March compared with 3.2% in February, due to an increase in food and fuel prices.
Outlook
Assuming an average crude oil price of $85 per barrel, ICRA projects WPI inflation to average 3.5% in this fiscal, with sizeable upside risks, including the possibility of a weak monsoon linked to El Nino conditions. On the other hand, CareEdge Ratings estimates around 5% WPI inflation, assuming crude oil prices at $90 per barrel on average this fiscal.
Madan Sabnavis, chief economist at Bank of Baroda, said WPI inflation could hover around 5% given current trends and the risks of monsoon-related disruptions that may push up food prices.