India’s Wholesale Inflation Rises to 1.81% in January, Highest in 10 Months

India’s Wholesale Price Index (WPI) inflation accelerated to 1.81% in January, marking the highest level recorded in the past ten months. The data, released by the Commerce Ministry on February 16, signals renewed pricing pressure in the economy, primarily driven by a rebound in food prices and sustained strength in the manufacturing sector.

What Drove the January Inflation Spike?

The surge in wholesale inflation can largely be attributed to the rise in primary articles and manufactured products. The food index moved from -0.43% in December to 1.55% in January, indicating a clear reversal in food price trends. Meanwhile, manufactured goods inflation rose to 2.86%, reflecting higher input costs across industrial sectors.

FY 2025-26 Inflation Comparison: CPI vs WPI (India)

Monthly comparison of Retail Inflation (CPI) and Wholesale Inflation (WPI) from April 2025 to January 2026.

Month	CPI (%)	WPI (%)	Trend Analysis
April 2025	3.16%	0.85%	Higher retail pressure
May 2025	2.82%	0.39%	Gradual easing
June 2025	2.10%	-0.13%	Wholesale decline
July 2025	1.61%	-0.58%	Cost relief phase
August 2025	2.07%	0.52%	Both rising
September 2025	1.44%	0.13%	Stable phase
October 2025	0.25%	-1.21%	Maximum relief
November 2025	0.71%	-0.32%	Wholesale negative
December 2025	1.33%	0.83%	Upward movement
January 2026	2.75%	1.81%	Sharp rise in both

📊 Conclusion: In January 2026, both CPI (2.75%) and WPI (1.81%) showed a noticeable increase, indicating rising cost pressures across consumer and wholesale markets.

Retail Inflation Also Climbs

Parallel to WPI data, Consumer Price Index (CPI) inflation increased to 2.75% in January from 1.33% in December. This marks the highest retail inflation level in eight months. Food and housing components played a significant role in pushing consumer prices upward.

Impact on Consumers and Businesses

Sustained high wholesale prices typically affect producers first. Over time, businesses may pass on increased costs to consumers. Sectors such as metals, chemicals, plastics, and rubber — which hold significant weight in WPI — are particularly sensitive to price movements.

How Inflation is Measured in India

India measures inflation using two primary indicators: WPI and CPI. WPI reflects price changes at the wholesale level between businesses, while CPI captures the prices paid directly by consumers. Manufactured products carry the highest weight in WPI at over 64%, whereas food dominates CPI calculations.

Government’s Role in Controlling Inflation

The government can influence inflation trends primarily through tax adjustments. For instance, during periods of sharp crude oil price increases, excise duty cuts on fuel have been used to ease cost burdens. However, fiscal space for such interventions remains limited.