Wholesale inflation remains near double digits despite a sharp moderation in fuel and power inflation
India’s wholesale price inflation eased marginally to 9.78 per cent year-on-year in July 2026 from 9.87 per cent in June, according to provisional data. The 9-basis-point decline was largely driven by a sharp moderation in fuel and power inflation, while price pressures across manufacturing and primary articles remained elevated.
Fuel and power inflation fell to 20.05 per cent in July from 27.41 per cent in June, providing some relief to overall wholesale price pressures. The segment had recorded inflation of 30.33 per cent in May, indicating that the pace of price increases has moderated for the second consecutive month.
Inflation in manufactured products increased to 8.29 per cent in July from 7.48 per cent in June, with chemical products, basic metals and electrical equipment among the major contributors. The data pointed to continued pressure from higher industrial input costs.
Inflation in the manufacture of chemical and chemical products stood at 13.12 per cent, while basic metals and electrical equipment recorded inflation of 12.56 per cent and 12.34 per cent, respectively. According to PHDCCI, higher demand for renewable energy devices and related components has contributed to price pressures in metals and electrical equipment.
“While the manufacturing sector continues to navigate through high input costs, the neutral stance of the recent Monetary Policy will support manufacturers by allowing for loans at stable interest rates,” said Rajeev Juneja, President, PHDCCI.
Primary Articles Inflation Rises
Inflation in primary articles rose to 8.52 per cent in July from 7 per cent in June, reflecting higher price pressures across several components. Food articles recorded inflation of 5.44 per cent, while minerals and non-food articles registered inflation of 13.28 per cent and 17.66 per cent, respectively.
PHDCCI said expectations of weaker agricultural production amid forecasts of the southwest monsoon at less than 94 per cent of the Long Period Average have led farmers to anticipate lower output. This has contributed to higher current stock prices and increased downstream price pressures.
The impact was also visible in manufactured food products, where inflation stood at 8.89 per cent in July. Higher prices of primary food articles can feed into manufacturing costs, particularly for businesses dependent on agricultural commodities as key inputs.
Global Supply Risks Remain
PHDCCI said the July WPI reading signals continued cost pressures on wholesalers amid international supply chain disruptions. The industry body expects wholesale inflation to remain elevated in the near term, although there could be moderation if energy and input costs ease.
“The immediate outlook is one of elevated but potentially moderating wholesale inflation. The key risks are renewed increases in global crude and commodity prices, persistence of metal and chemical price pressures, and weather-related food supply disruptions,” said Ranjeet Mehta, CEO and Secretary General, PHDCCI.
Mehta added that easing energy costs, improved domestic supply conditions and moderation in input prices could support a gradual decline in wholesale inflation. However, global commodity movements and domestic weather conditions are likely to remain important factors for the inflation trajectory.
Retail Inflation Also Rises
The wholesale inflation data comes after consumer inflation figures released on August 12 showed retail inflation at 4.45 per cent year-on-year in July 2026. The Consumer Price Index-based measure uses 2024 as its base year and compares prices with the corresponding month of the previous year.
Retail inflation was higher in rural areas at 4.84 per cent, while urban inflation stood at 3.96 per cent during July. The gap between wholesale and consumer inflation highlights the different price pressures faced by producers, businesses and households across the economy.
Economists polled by Reuters had expected wholesale inflation to rise 9.95 per cent year-on-year in July. The actual reading was therefore slightly below market expectations, even as inflation remained close to double-digit levels.
